business agenda issue 08

businessagendaTHe Official business publicaTiOn Of THe MalTa business bureau

THIS ISSUE

neWspaper pOsTISSUE 08 I SEP - NOV 2011

bUSInESSSMEs in Malta speak about the opportunities and obstacles they encountered when seeking to establish themselves within the European Single Market.

page 10

InTErvIEwDr Robert Visser the newly-appointed Director of the European Asylum Support Agency speaks about the Agency’s role in coordinating asylum and migration policies across Europe.

page 29

EnvIronmEnTHow the Energy Efficiency Directive will have a direct impact on the business community.

page 37

EU polIcyThe EU’s Posting of Workers Directive has come under the spotlight recently, but what are the main issues under discussion and how will they affect employers?

page 41

neW eu budgeT: MalTa negOTiaTing TO reTain neT recipienT sTaTus

sWifT acTiOn needed TO resTOre cOnfidence in THe eurO area

In an interview with this publica-tion, Malta’s Permanent Representa-tive to The European Union, Ambas-sador Richard Cachia-Caruana, has stated that Malta’s priorities for the EU budget will include “work-ing towards our eligibility for the convergence objective of the Cohe-sion Policy, the continued reform of the Common Agricultural Policy to ensure fairer distribution of the EU’s resources and an Own Resources system that is linked as closely as possible to the Gross National Income of each Member State.”

Malta’s Ambassador to the EU also stated that if Malta can no lon-ger qualify under the Convergence Objective, due to the country’s eco-nomic growth in recent years, the Maltese government will “work for

an allocation under the ‘transition regions’ objective, that reflects our development needs and ensures Malta’s position as a net recipient of the EU Budget.”

Ambassador Cachia-Caruana said that he expects some conten-tious issues to arise during the bud-get negotiations, particularly with regards to ‘Own Resources’, which will establish how the EU Budget is to be financed. He stated that “the proposals to introduce a tax on the financial transactions and a modernised VAT system are con-troversial and will certainly be con-tentious points for many Member States, including Malta.” According to Ambassador Cachia-Caruana, another difficult aspect in the nego-tiations may emerge on the overall

size of the Multiannual Financial Framework.

“Various Member States have, even prior to the publication of the package, made it clear that the size of the budget will be given a spe-cific focus in the negotiations given the current economic climate,” he stated. Nevertheless, Ambassador

Cachia-Caruana made it clear that the “poorer Member States must continue to be helped to ‘catch up’ with the richer ones” and that each must be given sufficient flexibility to channel funds to particular areas in line with their particular socio-eco-nomic priorities.

Speaking to Business Agenda, economist Dr Gordon Cordina has stated that “markets are displaying nervousness about the euro zone and this volatility is not helping to improve the already delicate situa-tion.” He also stated that “swift and bold action is required to restore much needed confidence in the euro area.”

Dr Cordina also said that that the debt crisis has shown the impor-tance of having sustainable public finances and it has also unmasked the fallacy that an increasing deficit and debt are something not to be worried about.

He maintained that “while fiscal consolidation through austerity mea-

sures is needed to rein in the grow-ing deficit and debt, such measures are, however, impinging negatively on an already weak recovery,” he explains.

He also stated that a debt restruc-turing process can have repercus-sions on other European coun-tries and the euro zone as a whole,

through the exposure of financial institutions to this debt and that, as such, a thorough review and strengthening of European banks is also needed.

IrElAnD In THE EU

Once referred to as the Celtic Tiger, Ireland still plays an

important economic and political role within the European Union.

See full story on page 16

See page 5 for full story

See page 13 for full story

BUSINESS AGENDA | SEP - NOV 20112

3BUSINESS AGENDA | SEP – NOV 2011

publisherContent House LtdMallia Buildings3, Level 2Triq in-NegozjuMriehel QRM3000

Tel: 00356 2132 0713Email: [email protected]

malta business bureauCasa LeonePjazza Robert SamutFloriana

Tel: 00356 2125 1719 (Malta Office)Tel: 0032 4859 81124 (Brussels Office)Email: [email protected]@mbb.org.mtwww.mbb.org.mt

Editor: Joe TantiDeputy Editor: claire Azzopardi Editorial Team: omar cutajar, Daniel Debono, mariella Scicluna

Business Agenda is the quarterly publication of the Malta Business Bureau. It is distributed to all members of the Malta Chamber of Commerce, Enterprise and Industry, all the members of the Malta Hotels and Restaurants Association, and to all other leading businesses by Mailbox Distribution Services, part of Mailbox Group. Business Agenda is also distributed by the Malta Business Bureau to leading European and business institutions in Brussels.

COLLABORATING PARTNER:

The Malta Business Bureau is a non-profit making organisation acting as the European Advisory and Support Office of the Malta Chamber of Commerce, Enterprise and Industry and the Malta Hotels and Restaurants Association. The MBB has two offices, the Head Office in Malta and the Representation Office in Brussels.

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27649 - Business Agenda.indd 1 10/9/10 10:52:08

By Joe Tanti, Chief Executive Officer, MBB

dire sTraiTs fOr eurOpe pOlisH presidency called TO break THe deadlOck

Just about when everyone thought Europe was out of recession and could finally look forward to a brighter future of economic growth and prosperity, a number of unfor-tunate realities surfaced that put us back on the edge of crisis. The near-economic default of Greece and the precarious financial position of vari-ous EU Member States, as well as the political turmoil and economic catastrophe in the Southern Mediter-ranean, have brought high-sky spirits back to ground.

No matter what circumstances are characterising the present inter-national political economy, Europe should do its utmost to sustain the ambitious EU2020 Strategy targets which it has set for itself, if we are to believe that our continent will man-age to retain its economic power status in decades to come. The Pol-ish Government may not have been

lucky to be called next-in-line to take charge of the European Presidency. Nevertheless, following the sum-mer recess, it is now really the right time for it to pull up its sleeves and take this opportunity to prove to euro sceptics that there is indeed a future for Europe, by addressing some of the serious issues that are critically at stake.

BUSINESSEUROPE has in recent weeks expressed its full support to the Polish Presidency’s political plat-form and furthermore highlighted a number of points as a course of action. Being an affiliate member of this influential organisation, the Malta Business Bureau is in agree-ment with these policy lines, fully aware that this direction will also ben-efit Malta and local businesses.

Perhaps the main priority of inter-est to us now that the debate has kicked off on an EU level is the dis-

cussions over the EU Budget that will run from 2014 to 2020. The Polish Presidency has pledged to reform the EU Budget and certainly this is wel-comed should it be able to provide the right channels with the right sources on national and regional levels. This is critical to sustain European com-petitiveness and support growth and employment. From a Maltese per-spective, it will be interesting to see how the island will be classified, given the economic progress registered in recent years that may result in Malta not being classified as a ‘convergence region’, but instead as a ‘transitional region’, meaning that it would retain two-thirds of the previous allocations for the incoming budgetary period. I also urge the readers of this paper to read through the comments provided by Ambassador Richard Cachia-Caruana for this edition of Business Agenda about the prospects of the EU Budget and its implications on Malta.

A second major business prior-ity for the Polish Presidency is the implementation of the Single Market Act. The Malta Business Bureau has led a national debate locally on this issue to highlight the importance this has for Maltese businesses. In recent months an official Position Paper was presented to Parliamentary Secre-tary Hon Jason Azzopardi and a busi-ness debate was held with MEP Louis Grech on the subject matter. There are some critical issues that need to be tackled instantly at a European level, which among others includes the creation of a patent protection system, the simplification of EU pub-lic procurement legislation, the adop-tion of an alternative dispute resolu-tion system and the enforcement of the Small Business Act, among oth-ers.

Maltese entrepreneurs have not shied away from the prospect of

operating in a much larger European Single Market, which is competition-driven, based on standards and qual-ity assurance. This indeed provided opportunities for our businesses in terms of developing trade relations (even through EU-third countries agreements) and internationalisa-tion. However, one cannot forget the complexity and occasional restric-tive interpretation of EU regulations which put Maltese businesses at a disadvantage due to our structural constraints and the inherent lack of capacity to handle all the adminis-trative reporting and regulatory obli-gations imposed by law. The Malta Business Bureau calls on the Polish Presidency to take political owner-ship and see through the relaunch of the European Single Market which is much needed to ensure the pursuit of an even economic recovery through-out the EU.


cOVer sTOry

The future EU Budget debate is about the Union’s financial expen-diture capacity over a seven-year period, with a total allocation of €971.5 billion, equivalent to one per cent of the EU’s gross national income (GNI). But what plans does the EU have for the 2014-2020 bud-get? How will it be allocated and how does Malta stand to gain?

FInAncIng THE bUDgET

While the EU Budget will certainly be one of the main instruments at the EU’s disposal when it comes to stimulating economic growth and securing economic competi-tiveness, there are a number of bones of contention that may arise throughout the budget negotiations. Ambassador Richard Cachia-Caru-ana expects that one of the most dif-ficult parts of the negotiations will be related to the proposals on Own Resources, which will establish how the EU Budget is to be financed.

“In particular the proposals to introduce a tax on the financial transactions and a modernised VAT system are controversial and will certainly be a contentious point for many Member States, including Malta,” he predicts, “Another diffi-cult aspect in the negotiations may emerge on the overall size of the

Multiannual Financial Framework. Various Member States have, even prior to the publication of the pack-age, made it clear that the size of the budget will be given a specific focus in the negotiations given the current economic climate.”

But what is Malta’s take on such issues? Surely as a Member State, despite its small size, Malta will be making its voice heard on these issues. Ambassador Cachia-Caru-ana explains that Malta’s priori-ties for the EU budget are working towards our eligibility for the con-vergence objective of the Cohesion Policy, the continued reform of the Common Agricultural Policy to ensure fairer distribution of the EU’s resources and an Own Resources system that is linked as closely as possible to the Gross National Income of each Member State.

“If it is not possible for Malta to qualify for the convergence objec-tive, due to our economic growth over recent years compared with other Member States, then we will work for an allocation under the ‘transition regions’ objective that reflects our development needs and ensures Malta’s position as a net recipient of the EU Budget,” he explains.

“However, we will judge the spe-cifics of the Commission’s detailed proposals when these are issued in October, focusing mainly on two criteria. Firstly, whether the prin-ciple of solidarity remains at the forefront of the EU Budget and sec-ondly, whether the Commission has avoided a ‘one-size-fits-all’ approach,” Ambassador Cachia-Caruana cautions. “The poorer Member States must continue to be helped to ‘catch up’ with the richer ones and each of them must be given sufficient flexibility to chan-nel funds to particular areas in line with its particular socio-economic priorities.”

In fact, the 2014-2020 budget also contains a proposal for the introduction of a new 'region cat-egorisation system', with the intro-duction of a 'transition region', under which Malta may fall. Based on the assumption that Malta will be eligible as a ‘transition region’, this would guarantee that Malta receives two-thirds of its current allocation of Structural Funds in the period from 2007 to 2013.

Ambassador Cachia-Caruana explains that in the 2007-2013 bud-get period, Malta’s GDP per capita was less than 75 per cent of the EU average and for this reason Malta

was placed under the ‘Conver-gence Objective’, which used to be referred to as Objective 1 status.

“Given Malta’s consistent eco-nomic growth over the last few years, there is a possibility that Malta’s GDP per capita level will be more than 75 per cent of that of the EU27 and that Malta will be placed in the ‘transition regions’ category,” he explains. “However, it is important to note that GDP statis-tics for the last 5 years - the basis of which determines which regions are below 75 per cent, and as such qualify for the convergence objec-tive, and which regions are no lon-ger below 75 per cent - are still not finalised and we do not yet know in which category Malta will fall.”

EconomIc growTH AnD compETITIvEnESS

One of the main issues that should be kept in mind is that the EU budget proposals were devel-oped in the context of a precarious economic situation, especially in the euro area. As Ambassador Richard Cachia-Caruana states, the primary aim of the EU Budget is to encour-age public spending in those areas which will increase competitiveness and growth.

“I believe that the focus here should be on using funding instru-ments, such as the Structural Funds and the Cohesion Fund as well as Research and Innovation programmes, to boost development in priority areas that are

“ …We will work for an allocation under the ‘transition regions’ objective that reflects our development needs and ensures Malta’s position as a net recipient of the eu budget ”

securing an effecTiVe eu budgeT

- Ambassador Richard Cachia-Caruana

discussions on the future eu budget kicked off a few months ago and the debate on how to best allocate eu funds is underway. business agenda speaks to Malta’s permanent representative to the european union, ricHard cacHia-caruana, to find out more on the main issues under discussion and how certain budget decisions could affect Malta.


cOVer sTOry

critical for ensuring economic growth and boosting competive-ness,” he states.

“The EU and its Member States also have the advantage, due to the adopted Europe 2020 strategy, of having a clear road-map on how to manage this process and iden-tify the true priorities. The central aim of the Europe 2020 strategy is to implement measures, specific to each Member State, that are critical

to driving economic growth in each of these States, with the ultimate target of achieving a competitive and vibrant EU by the year 2020,” he continues.

While economic growth and the competitiveness of EU economies are certainly amongst the main aims of the 2014-2020 budget, the Commission’s proposals also target areas such as education and train-ing, research, development and

innovation, trans-European trans-port and energy infrastructure. As Ambassador Cachia-Caruana states, investing in these areas will support economic growth and sus-tained competitiveness and as such, the Commission’s proposals are a meaningful response to the realities of globalisation.

ASSISTIng rESEArcH, InnovATIon AnD DEvElopmEnT

Amongst the many proposals put forward by the Commission, is an increase of approximately 25 per cent in the budget allocated to research, innovation and techno-logical development. Ambassador Cachia-Caruana points out that the Commission has said time and time again that increasing investment in research and development across the EU is key to ensuring long-term sustainable growth and competi-tiveness across the Member States.

“Investing in research and devel-opment is expected to create new employment opportunities and will strengthen the EU’s position in today’s rapidly evolving globalised markets,” he explains. “Malta agrees with this thinking and, together with the other EU Member States, we agreed that one of the headline targets of the Europe 2020 strategy should be achieving the target of investing 3 per cent of GDP towards research and development by 2020 across the EU.”

Nevertheless, he states that it is important to balance this increase in investment with the specific chal-lenges, threats and opportunities of the individual Member States. “There are Member States such as Malta, which, due to its size and eco-nomic structure, cannot go beyond a certain level of investment in areas such as research and development and, as such, need to focus more on

other priorities such as basic infra-structure which is equally important to ensure socio-economic develop-ment. If we take this reasoned and realistic approach then I see no rea-son why this increase in spending should not translate into tangible benefits for Maltese industry and the economy as a whole.”

However, Ambassador Cachia-Caruana states that a concrete effort is needed to promote further growth in the private sector, in par-ticular small and medium sized enterprises, which are the major source of economic growth and job creation in the European Union. “It is important to create the right con-ditions for businesses to invest in research, development and innova-tion, and the Government will sup-port proposals for simplifying rules to facilitate the drawing down of EU funds by the private sector,” he con-cludes.

“There are Member states such as Malta, which, due to its size and economic structure, cannot go beyond a certain level of investment in areas such as research and development and, as such, need to focus more on other priorities such as basic infrastructure which is equally important to ensure socio-economic development. if we take this reasoned and realistic approach then i see no reason why this increase in spending should not translate into tangible benefits for Maltese industry and the economy as a whole.”_ Ambassador Richard Cachia-Caruana


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Founded in 1996, the Malta Business Bureau is the voice of Maltese business in the EU. The MBB ensures that it updates and informs the Maltese business community of the developments unfolding in Brussels that can be of direct interest to them. The MBB represents the Malta Chamber of Commerce, Enterprise and Industry and the Malta Hotels and Restaurants Association in Brussels and Malta, by liaising directly with the European and local counterparts.

The MBB this year is celebrating its 15th Anniversary and is marking this milestone by launching its rejuvenated brand identity.

If you think we can be of any assistance on any EU-business related matter please get in touch. We’re there to assist you.

Celebrating 15 Years of Service

Malta Office: Casa Leone, Pjazza Robert Samut, Floriana, Malta / Tel: +356 2125 1719 / [email protected]


Mbb updaTe

sTeering THe MalTa business bureau:driVe, cOMMiTMenT, eXperience

The Malta Business Bureau’s (MBB) composition of its Board of Trustees has seen the introduc-tion of two new Members, with Mr Charles Brincat and Mr Sergio Vella joining the team recently. They replace outgoing Board Members Mr Tancred Tabone and Mr Mario Spiteri. Mr John A. Huber is serving as President for a second consecu-tive year, while Mr George Micallef, Mr Anthony Zahra and Mr Anton Borg have all been re-confirmed as Board Members.

MBB President, Mr John A. Huber, stated “I am pleased to con-tinue to serve as President of the Malta Business Bureau. My goal is to continue building on the level of awareness on EU affairs within the local business community. I con-sider this as extremely important for our entrepreneurs, being that the EU is an economic bloc offering both challenges and opportunities. I would like to see more initiative and active participation in EU affairs from Maltese businesses, and our intention is to further increase consultations in order to be able to voice their vision and concerns at the highest levels within EU institu-tions.”

Mr George Micallef, who is also President of the Malta Hotels & Restaurants Association went a step further, and while recognising the commitment of fellow Board members he said “I am pleased that I form part of the Malta Busi-ness Bureau Board with members who are very pro-active in the deci-sion making process. Their diverse backgrounds and expertise rep-resent a broad spectrum of local businesses, which facilitates a bet-ter understanding of the business needs”.

Mr. Anthony Zahra’s vision for the MBB is to serve as a pivotal role for business vis-a-vis the European Union’s acquis and the various opportunities it offers.

“Today’s reality is that apart from the Government, the private sec-tor now also has governing institu-tions in Brussels who are continu-ously discussing directives which have a direct impact on businesses in Malta. The MBB gives a voice to the private sector in Brussels prior to those decisions being taken. It is also the private sector’s focal point on all matters concerning the EU, including funding opportunities,” he stated.

Mr Anton Borg, who has a long experience on the Board explained that “in recent years I have seen the Bureau shift its focus from collat-ing information for pre-accession discussions with the Authorities, to a new role of understanding the impact of new recommendations and directives on local industry. The role that MBB is playing is not only unique in Malta but also crucial to Industry.”

Mr Charles Brincat, a recent addi-tion to the Board, commented on this new professional venture. “My experience as a board member is definitely positive, being impressed by the excellent organisation and enthusiasm at the MBB. The MBB can serve to provide an invaluable source for business opportunities in the EU to our local entrepreneurs and thus can further promote the growth of enterprise in Malta,” he stated.

Mr Sergio Vella, who has also been recently appointed to the Board stated: “The hands-on exper-tise together with the drive of this team convinces me that tangible results and goals can be achieved. My vision for the Malta Business Bureau is the ability of providing practical support to the Maltese business community in interacting with a number of EU organisations, as we seek win-win situations that will create further value to Malta’s initiative.

LEFT: MR JOHN A. HUBERRIGHT: MR ANTHONy ZAHRA

FAR LEFT: MR ANTON BORGLEFT: MR CHARLES BRINCAT

RIGHT: MR GEORGE MICALLEFFAR RIGHT: MR SERGIO VELLA

business agenda gives an insight into the Mbb board's vision for the organisation and the strengths that each board member brings.

mr JoHn A. HUbEr (prESIDEnT): Malta Chamber Officer, Board of Management and Managing Con-sultant of John Huber & Associ-ates.

John A. Huber, President of the Malta Business Bureau, is a Fel-low of the Malta Institute of Taxa-tion, and a member of the Malta Institute of Management. John has specialised in personal tax for the past twenty-one years. He boasts a strong practice which includes up-to-date assessment of tax law, immigration, residency, expatriate and relocation services and work permit requirements.

mr AnTon borg - Malta Cham-ber Officer, Board of Management and Joint-Managing Director of JB Plastics Ltd.

Anton Borg is a Certified Public Accountant and sat on the Malta Institute of Accountants Council for fourteen years. Anton is a Director of J.B. Plastics, Elepac, Meritlink and Eurosupplies Limited. He has held various posts in the FOI includ-ing that of President from 2003 to 2005 and also represented it on MCESD. He served on the Board of Directors of Malta Industrial Parks and held the post of Deputy Chair-man of Malta Enterprise.

mr SErgIo vEllA - Malta Cham-ber Council Member and Managing Director of Actavis Malta.

Sergio Vella holds extensive local and international experience within the manufacturing world. Over a thirty-year span he has occupied a number of senior management positions within the industrial context both in Malta and abroad.

Over the last twenty years, he has driven a number of success stories as General Manager of Baxter Ltd. and, currently, as Managing Direc-tor of Actavis Ltd.

He has also served on a num-ber of Government Boards includ-ing the Malta Transport Authority, Malta Development Corporation and Malta Shipyards Ltd, as well as having been a Council member on the Federation of Industry. He is currently a Board member of the Manufacturers Economic Group within the Malta Chamber.

mr cHArlES brIncAT – Malta Chamber Council Member and General Manager of Carlo Gavazzi.

Charles Brincat has had an extensive career in the electronics manufacturing industry with time spent at Shirasuna Corporation and STMicroelectronics Ltd., which lead to his current position as Gen-eral Manager at Carlo Gavazzi Ltd; a position he has occupied for the last three years.

Elected as Member on the Coun-cil of the Malta Chamber since 2009, Charles has held various other offices such as Deputy Chair-man of the Manufacturing and Other Industries Economic Group within the MCCEI. He is also a Member on the National Accredita-tion Board.

mr gEorgE mIcAllEF - Presi-dent MHRA and Managing Director Sunroute Hotels Ltd.

George Micallef is a seasoned hotelier but also a practising tour-ism development consultant for the past twenty-five years. He has led

a number of projects in the public and private sector and served as a consultant to Governments, pri-vate and public institutions, both in Malta and overseas. Over the years he sat on various tourism related governing boards, committees and councils. Mr, Micallef has pub-lished various articles on tourism policies and development and has delivered a number of papers at various International conferences.

Mr. Micallef is President of the Malta Hotels & Restaurants Asso-ciation and formerly President of the Malta Business Bureau. He is also Managing Director of Sunroute Hotels.

mr AnTHony ZAHrA – Vice Presi-dent MHRA and CEO of Alpine Holdings Ltd.

Anthony Zahra heads two pri-vately owned Groups- Alpine Hold-ings Ltd and Bastion Holdings.

He has held various Govern-ment appointments amongst which included Director of The Malta Development Corporations, Malta International Airport and Air Malta plc. He was also appointed as Senior Vice-President of the Feder-ation of Industries, Council Mem-ber of the Malta Chamber of Com-merce and recently Vice-President of MHRA.

In 1994 he was appointed Hon. Consul of the Republic of Lithuania for Malta, and in 2004 he was dec-orated with the Cross of Officer of the order of Lithuanian Grand Duke Gediminas for services rendered to the Republic of Lithuania.

bOard MeMber prOfiles


ecOnOMy

The European Single Market, has played an important role in the development of the European Union, particularly from an eco-nomic perspective. It was created and developed with the main aim of guaranteeing the free movement of goods, services, capital and people within the EU’s 27 Member States.

While this seems to be an undis-putedly fine idea on paper, it is never a simple transition from theory into practice, particularly in the case of small businesses that are faced with limited resources. “While the Single Market and Malta's accession to the EU has made it easier to do busi-ness within the Union, accessing the Single Market does not come with-out its difficulties and complications for SMEs,” explains Mr Klaus Ped-ersen, Internationalisation Manager of the Malta Chamber.

He states that while Malta is still a relatively young EU Mem-ber State, there is a good level of awareness regarding the opportu-

nities that the Single Market offers. However, there is still a lot of room for increased internationalisation efforts in all sectors and industries. Mr Pedersen is also quick to state that “there is still more potential for Maltese businesses to benefit from the Single Market, especially for companies in the tertiary sector.”

“Nonetheless, in order to suc-ceed, it is important to be aware of the challenges that may pres-ent themselves, such as language barriers and different cultures, in addition to the fact that certain standards are not fully harmonised, such as in the case of labelling,” he explains.

“At a commercial level, the chal-lenge is also to identify the opportu-nities which may exist due to com-petitive advantages of Maltese firms over foreign ones, but a company can only identify these when it has attained an intimate knowledge of the market in question, including parameters such as product, price,

national market conditions and reg-ulatory conditions,” he says.

However, Mr Pedersen also maintains that with good planning, such internationalisation initiatives could prove to be very successful. “It has always been a truism that the most crucial element to be success-ful in internationalisation is to take the first step. Companies will only know this once they take the first steps of doing market research and visiting target markets,” he states.

“Many companies are often still unaware of the full potential of the European Single Market and of how to go about accessing it,” he says. “But with today’s heavy reliance on digital tools for anything ranging from communication, to promotion and direct sales, the Single Market can be accessed easily through the internet,” Mr Pedersen says.

He explains that access to infor-mation and formal requirements to gain entry to the Single Market have

MOre pOTenTial fOr MalTese businesses TO benefiT frOM THe single MarkeT

The european single Market gives local businesses access to millions of consumers, but how easy is it to access in practical terms? business agenda speaks to a number of stakeholders about the opportunities and drawbacks of being a small enterprise looking to make it big in europe.


ecOnOMybecome much more simple for Mal-tese companies wishing to export to the EU than they used to be before accession, and market access is certainly easier than exporting to most non-EU countries.

“While technical trade barriers have fallen, companies still need to arm themselves with knowledge before being able to benefit from this,” he explains. “From experi-ence, we know that companies need focused and reliable knowl-edge and it is for this reason that we have established business councils within the Malta Chamber to focus on specific markets.”

He explains that such services are worthwhile not only to those who seek to venture outside of Malta, but it also serves to open up the Maltese market to EU-based companies. “The Single Market has opened up a lot of windows of opportunity for Maltese companies, but we feel that many of these are still under-exploited due to lack of awareness,” he concludes.

TrIED AnD TESTED

While hundreds of Maltese busi-nesses are still toying with the idea of exploring the potentials offered by the Single Market, many other have already taken the plunge. Webcraft Limted is one such com-pany. As the Chief Executive Offi-cer, Mr Keith Gauci, explains, “the European Single Market represents

a remarkable and largely untapped opportunity for local businesses to expand, diversify and grow outside the local sphere.”

Mr Gauci is of the opinion that Malta can be the ideal place to start a small business that can grow to reach other European markets. “Doing business across borders has always been challenging,” he acknowledges. “But it also presents unique opportunities - the European market offers Maltese business-men a real chance to break out of a small and crowded local market and to compete within a bigger play-ing field.”

“From my experience, gaining access to the Single European Mar-ket has been beneficial to trade, however I do believe that its effec-tiveness has not yet been felt across all the business spectrum,” states Mr Gauci. “I believe that this is due to the very diverse nature of business sectors, such as services, goods, manufacturing and research, each with their own characteristics and regulation.”

He explains that one of the major success factors for businesses seeking to operate in the Single Market is the careful choice of a business model suited to operat-ing in the current European Mar-ket. “Trying to force a local busi-ness model onto an international marketplace is a common mistake,” he cautions. “One way to counter

imperfections is to seek to collabo-rate with other businesses within each market zone. Local partners can often provide the support and knowledge necessary to make your product a success in each area, whilst lowering the initial market research and penetration costs.”

Mr Alex Aquilina, Chairman of Eagle K-wear Ltd, has also gained extensive experience in operat-ing overseas. He states that “every company that decides to target the European single market must be prepared to go out there, identify

the opportunities and get a good understanding of how the market functions.”

According to Mr Aquilina, one of the main difficulties encountered when working to establish a pres-ence in Europe is the fact that the European Single Market is so huge, making it difficult to focus on one particular area. “However, Mal-tese companies would only require a niche part of the market to make business sense,” he states, “So the first difficulty would be to iden-tify your potential customer. In this respect, market research is a must and you need to have strong finan-cial backing, not to mention a strong dose of persistence and patience.”

In fact, his company took advan-tage of the European Regional Development Funds grant schemes. “This gave us the opportunity to pre-pare an international business plan which included market research, a rebranding exercise, upgrading our marketing tools which included a new company profile together with a company video and participation in a number of trade shows,” he explains.

Mr Joe Pace, Managing Direc-tor of Consolidated Biscuit, is also a seasoned operator when it comes to operating within the European Single Market. With the aim of gear-ing up towards targeting foreign, including European markets, a few years ago Consolidated Biscuit

turned its focus producing tradi-tional Maltese products under the Tal-Furnar brand, giving it a unique range of products that proved to be far more strategically resilient to increased imported competition.

“Today, some of our products are not only are market leaders in Malta, but have also attracted cli-ents from other EU Member States including the UK and Germany,” he explains. “We have also managed to develop the export-side of busi-ness successfully under third party trademarks, for blue chip compa-nies like Jacobs Fruitfield, Foxes Biscuits and Ryvita amongst oth-ers.”

He explains that the major chal-lenge that the company faces is probably the high volume, low value of its products when it comes to shipping costs. “This is a handicap operating from such a small local island base. It is becoming increas-ingly difficult to formulate feasible price structures when evaluating new projects,” he explains.

“Now that most of the national government incentives for industry have had to be curtailed because of the state aid regulations within the EU, it is becoming more important for Government to conduct proper impact assessments prior to taking drastic decisions on matters effect-ing industry such as increased fac-tory rents and industrial estate ser-vice charges,” he concludes.

“...gaining access to the single european Market has been beneficial to trade, however i do believe that its effectiveness has not yet been felt across all the business spectrum,” _ Mr Keith Gauci


eurOpean ecOnOMy

There is absolutely no denying the fact that the euro zone is fac-ing the most challenging times of its young history. But the question on everyone’s mind is ‘will the euro zone pull through sufficiently and in time to prevent further trouble?’

According to economist, Dr Gor-don Cordina, “swift and bold action is required to restore much needed confidence. "Markets are displaying nervousness about the euro zone

and this volatility is not helping to improve the already delicate situa-tion.”

Dr Cordina explains that the debt crisis has shown the importance of having sustainable public finances and it has also unmasked the fal-lacy that an increasing deficit and debt are something not to be wor-ried about. “While fiscal consolida-tion through austerity measures is needed to rein the growing deficit

eurO ZOne crisis: sWifT and bOld acTiOn is reQuired TO resTOre MucH needed cOnfidence...” dr gordon cordina

“

The current state of affairs within the euro zone has been cause for concern for months, with state leaders being called upon to take decisive action to tackle the crisis as soon as possible. business agenda speaks to economist dr gOrdOn cOrdina about the situation.


eurOpean ecOnOMy

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and debt, such measures are, how-ever, impinging negatively on an already weak recovery,” he explains.

“In a monetary union such as the euro zone, currency devaluation for a country like Greece is not possible. Therefore, a programme of liberali-sation, privatisation, competition and structural reforms is needed,” he continues.

He also states that those coun-tries assumed to have relatively minor fiscal problems should

be assisted in implementing the required reforms. On the other hand, he also believes that coun-tries deemed insolvent should be encouraged to implement mea-sures aimed at improving their liquidity.

“Nevertheless, a debt restruc-turing process can have repercus-sions on other European coun-tries and the euro zone as a whole through the exposure of financial institutions to this debt,” he cau-tions. “Therefore, a thorough review

and strengthening of European banks is also needed. The role of the European Central Bank should be highlighted as it can restore the confidence needed by giving a com-mitment to provide unlimited liquid-ity for as long as it is required.”

There is no doubt that leaders within the euro zone are feeling the pressure. They are under the spot-light, expected to make the right decisions, to find the most effec-tive solutions. One of the main pro-posals currently being debated is the need to increase the European Financial Stability Facility (EFSF). But simply increasing the ‘bail-out’ coffers will not be enough to save the monetary union.

As Dr Cordina explains, “apart from issuing loans, the role of this vehicle has been extended to buying sovereign debt and to recapitalize banks. Since it became fully opera-tional in August 2010, two countries namely, Portugal and Ireland, have benefitted from this mechanism. Through such measures, the euro zone finance ministers would be increasing the possibilities to regain the trust of the investors towards the euro currency in itself.”

However, he points out that, on the other hand, it has been widely argued that with a lending capac-ity of €440 million, the EFSF is

only effective in rescuing countries such as Portugal and Ireland from default. If markets become suspi-cious about the future sustainability of Italy’s economy, the fund would not be able to bail out the country’s €1.9 trillion of debt.

“In line with the corrective mea-sures which need to be implemented in a short period of time, preven-tive measures need to take place through major fiscal and structural reforms,” he states. “Among these measures is the design of new and innovative systems and procedures which are intended to anticipate the occurrence of a recession, enabling countries to act in advance.”

SEcUrIng FUTUrE STAbIlITy

The design of innovative financial systems and procedures may cer-tainly be the way forward when it comes to both corrective as well as preventive measures, but what form could such measures take?

“When it comes to designing more sustainable financial systems, we need to bear in mind the fact that macroeconomic imbalances within a number of countries of the euro zone were not a direct result of the recession,” Dr Cordina states. “Even before 2008, the proportion of debt to GDP in the euro zone was already at an unsustainable level.

In fact, in 2005, the average debt to GDP ratio of the eurozone Member States stood at 70 per cent - that is 10 percentage points higher than the sustainable level stipulated by the EU within the Maastricht cri-teria! At the time, this should have been an alert message for the euro zone to undertake the required fis-cal and structural reforms so as to avoid any potential difficulties in the face of a global crisis.”

“Corrective measures are only the beginning of a series of reforms which should take place in order to avoid such a mess to occur in the future,” Dr Cordina maintains. “Prevention is also needed, namely through better surveillance of fis-cal and macroeconomic imbalances and reforms structural nature aimed at achieving EU2020 targets.”

“In addition, other measures that stimulate productivity growth are deemed crucial for sustainable economic growth. Rather than bud-get cutting, competitiveness and growth enhancing measures should be designed and implemented so as to improve the quality of life of the European citizen. The main priority should remain that of safeguard-ing jobs. Public sector investment should also be encouraged so as to allow the private sector to gain momentum,” he concludes.


3years @4.25%p.a.2

years @

4.00%p.a.1year @

3.75%

p.a.


eu cOunTry prOfile

Ireland has been an active mem-ber of the European Union since 1973, engaging fully in all the dis-cussions and changes that have taken place at EU level. Prior to gaining entry, Ireland was strug-gling to find its place after having gained independence from the UK, and back then it was perceived to be almost ‘insignificant’ by most of the global community.

However, things have certainly changed. The country’s EU mem-bership has had a significant impact on its development, and similarly, Ireland has also contrib-

uted to the development of the EU as a whole. In fact, Ireland’s com-mitment to the UN and outlook on peacekeeping is a core value of its EU membership.

As in the case of most EU Mem-ber States, Ireland has seen much improvement since forming part of the EU. For starters, the stan-dard of living improved drasti-cally, especially when taking into fact that it was perceived to be one of the poorest countries in Europe, with living standards fall-ing amongst the lowest. The EU has also had an impact on Ireland’s

HigHs and lOWs

EU EnTry: 1973

popUlATIon: 4.58 million

oFFIcIAl lAngUAgE: Irish, English

mAIn TrADIng pArTnErS: Great Britain, USA, Belgium

mAIn ExporTS: Pharmaceuticals, Organic Chemicals, Computers

mAIn ImporTS: Computers, Electrical Machinery, Road Vehicles

gDp: €40,108 million

UnEmploymEnT: approx 14.5%

as an eu Member state since 1973, ireland is an interesting case study on how the various aspects of membership impact on the social, economic and political development of a country. krisTa Micallef TrigOna takes a closer look at ireland in the eu.

ireland:

fact

file


eu cOunTry prOfile

education levels as well as on Irish businesses, which through the EU was able to tap into a market of over 490 million people. Further-more, its membership has helped bring peace and political agree-ment in Northern Ireland.

European Union membership, has also been critical on Ireland’s economic development. The EU has helped increase investment and trade in Ireland, which in turn boosted its economy, enabling its small, open economy to be suc-

cessful in a modern, global mar-ketplace. Since the early 1990s, the level of Irish real GDP saw excep-tional economic growth, doubling in size throughout a little more than a decade. Furthermore, it accounted for around 2.1 per cent of overall output in the Euro Area in 2007.

But in more recent times, media attention has been focused on Ire-land’s economic downward spiral. By the second half of 2007, the pace of economic growth deceler-

ated primarily due to a contraction in housing construction. In 2008, the economy took a turn for the worse, whereby output fell for the first time since 1983, and tumbled further in 2009 when the reces-sion deepened. As a result, exter-nal demand for Irish exports also worsened.

Nevertheless, in light of the global economic and financial cri-sis, its membership within the EU has proven to be all the more important, whereby promoting

recovery and stimulating demand has become increasingly clear. The EU’s broad economic goal is to alleviate the economy and as a result it is now taking extraordi-nary measures to restore stability and get credit flowing again. Fur-thermore, the EU is also taking steps to ensure that Europe will be protected from economic turmoil in the future.

However, as a result of the cur-rent global economic climate, unemployment has also been

effected, leading to thousands of Irish workers to lose their jobs. In 2007, the rate of unemployment dropped to historically low levels, averaging at around 4.5 per cent. And in 2009, it increased to almost 12 per cent.

Despite the havoc that it has cre-ated, Ireland remains positive on creating new employment oppor-tunities by becoming world leaders in the up-and-coming ‘green econ-omy’. In fact, the Irish Government sees this sector as key in the devel-opment of smart economy, target-ing the green sector for investment and job creation.

The EU has also taken steps to promote employment. The “Europe 2020” Strategy, for exam-ple, aims to bring employment rate for women and men (aged 20-64) up to 75 per cent, and meanwhile hopes to promote better participa-tion amongst youth, older people and low skilled workers. This strat-egy should thus help ensure that Ireland is in a strong position to provide jobs for today’s workforce and the future.

Another aspect that Ireland has embarked on to solve this issue is the European Globalisation Adjust-ment Fund (EGF), a source of fund-ing provided by the EU to facilitate groups of workers who lose their jobs as a result of changing global trade patterns. This fund will thus help unemployed workers with job-seeking, re-training and self employment.

As it stands though, the future for Ireland is uncertain, but according to the Economic and Social Research Institute Ireland has taken into consideration two medium-term scenarios for the economy, which differ significantly, depending on the future growth in potential output in the economy.

The first is a ‘High Growth’ sce-nario which assumes that the world economy sees a renewed growth and an improvement in competitiveness over the next five years, and a Low Growth scenario which assumes a much lower responsiveness of Irish output with respect to world output than in the past. Therefore, these two scenar-ios can be used to test the sturdi-ness of any response when faced with such uncertainty.


case sTudy

Making iT

bigThe corinthia group of companies is widely acknowledged as one of the largest and most successful Maltese business entities around. alfred pisani, who has been at the helm of the group for years, has accomplished what many simply dream of. krisTa Micallef TrigOna speaks to the man behind one of Malta’s most prestigious companies.

Business mogul Alfred Pisani is a tough act to follow. His drive to succeed and his thriving ambition has led him to own, and manage, the Corinthia Group of Companies, making him one of the most suc-cessful ‘movers and shakers’ in the local business community.

His journey in the hospitality industry takes him back to 1962. In its early days, Corinthia started out as a restaurant in Attard which Mr Pisani managed – its well-known name was inspired by the columns of the villa which were reminiscent of Corinthian columns.

However, Alfred Pisani’s drive lead him further, and just two years later he had built an extension to the villa in Attard, adding 158 rooms on to it. In 1968 he opened his first hotel, The Corinthia Pal-ace, which marked the start of the group’s franchise.

By the time the '70s rolled along, Corinthia established five hotels in various locations across the island. However, after this successful accomplishment, there was not much more room for growth here – and so, it was this stepping stone that took the group overseas, into

Turkey, Eastern Europe and even-tually, North Africa.

Without a doubt, success has always been a driving force of the Corinthia Group. “The running anima that is important for a group to develop is the commitment to perform,” Mr Pisani maintains. “We have always held the belief that whatever we do is done well, in terms of quality, in the way we obtain things and in how we nego-tiate. This has been a sentiment which has prevailed throughout the life of the company,” he adds.

Furthermore, the group has always adopted a clean and organ-ised approach to doing business. “This has led us to control a num-ber of facets of the company,” Mr Pisani says. “We are owners of our hotels, we develop and reorgan-ise them (through the company IHI that we set up in 2000) and we also manage them. Recently, we also established our own system for reservation – thus making the Corinthia Group a totally indepen-dent company.”

It was the group’s clean approach in doing business that enabled it

to make it through the economic recession in 2008. “One of the poli-cies that we took at board level was never to stretch ourselves finan-cially, so we kept our gearing at 50/50,” Mr Pisani maintains. “We took into consideration that there will always be dips in the industry, so we have always made it a point to remain highly clean in our equity – if this were not the case, we would have most definitely found the economic crisis difficult to go through.”

However one major and unex-pected challenge which the group


case sTudy

had to overcome was the recent uprising in Libya. “This was a very unusual experience for us, which required unusual decisions,” Mr Pisani divulges. “We had a choice to either shut down and wait for better times, or to do as we did – whereby we remained open and reduced our staff to a bare mini-mum, which allowed the hotel to operate. Had we shut down, the hotel would have been vandalised; by keeping it open we retained the continuity of the hotel and the jobs. We have thankfully faced this very difficult phase, and are now looking forward to things calming down,” he says, with a sigh of relief.

But in the midst of all the chaos in Libya, the Corinthia Group accomplished a highly-anticipated milestone: the newly opened hotel in London. This hotel will pave the way for the group’s bright future. “A hotel in London has a much bigger exposure and has a greater reach-ing marketing potential,” Mr Pisani states enthusiastically.

“This is a great achievement for the Group as it shows that we can build a property which can stand on its own feet amongst all the other well known brands. As a result, it helps our management company achieve more awareness which in turn will entice more hotel owners to approach us and ask us to man-age their properties,” he adds.

Unsurprisingly, the Group’s future plans are highly ambitious. “Our main objective is to develop our managing company,” Mr Pisani says. “To do this, we need to buy our way into big cities such as Paris, New york and Beijing, until eventually, buying our way in will no longer be necessary as every-body will be aware of our brand and more importantly, will become concious of our high standard of service, which will generate inter-est in our product.”

On a final note, Mr Pisani con-cludes with an encouraging word for the local hospitality industry. He maintains that in Malta, hotels tend to underestimate their prod-uct, and adds that “four and five-star hotels should be proud of what they have. Owners need to be more bullish and demanding in their rates. They need to recognise that in terms of what Malta offers we are not over-priced, but rather we are far behind when compared to similar products that are offered in Italy, France and England.”

He adds that the hotel industry should also strive to attract more corporate business visitors who are willing to pay a higher rate, especially within five-star hotels. “Malta’s accession into the EU has brought a tremendous amount of companies to our shores as it has given the islands more security, but furthermore, companies are able to benefit from the tax situa-tion here. As a result, this has had quite an impact on the local hotel industry which now contributes to around 40 per cent of the industry’s client base,” he concludes.

“We had a choice to either shut down and wait for better times, or to do as we did – whereby we remained open and reduced our staff to a bare minimum, which allowed the hotel to operate.”


aWareness

lOcal cOuncils and ngOs in acTiOn fOr ecO-gOZO

fiMbank spOnsOrs preserVaTiOn Of MagliO garden MOnuMenTs

geTTing THe rigHT persOn fOr THe jOb

inVesTing aT an early sTage is THe key TO MeeT any fuTure lOng-TerM gOals

The Eco-Gozo vision is happen-ing through an array of proj-ects across the different facets of Gozitan society. The Ministry for Gozo, through the Eco-Gozo Regional Development Director-ate has launched two substantial schemes with an allocation of over €2 million for Local Councils and NGOs to assist them in par-taking in the implementation of the eco-Gozo objectives through projects in the community.

Most of the projects presented by NGOs and Local Councils under the eco-Gozo scheme reflect the needs of society and contrib-ute towards the achievement of higher sustainability standards in Gozo, improving the environment, and fostering a society and econ-omy which can then support and sustain this environmental prog-ress. Several NGOs have now ben-efited from eco-Gozo funds– and a good number of these projects are currently being implemented.

In the economic sector, funds have been allocated to the Gozo Business Chamber to develop an online portal and forum to encourage, attract and facilitate bi-directional international ICT

and Research and Development collaboration. This project has the potential to spawn clusters of excellence, with direct and indirect economic benefits and activity in both Malta and Gozo. Other eco-Gozo funds have been allocated for the agriculture sec-tor, an important element to the island’s economic and environ-mental welfare. Other proposals which have secured eco-Gozo funding are directly linked to the tourism sector, another impor-tant pillar in the island’s economy, which includes projects related to the diving industry.

The conservation of rain water and other freshwater resources forms an integral part of the

eco-Gozo strategy whereby sev-eral reservoirs are being built under the schemes. Other proj-ects include treatment of sewage water for reuse and harvesting of this asset through the cleaning of dams in valleys.

Several other projects funded under the Eco Gozo schemes are already being implemented across the island. Other projects are being implemented directly by Government through the Ministry for Gozo. The eco-Gozo schemes allow all sectors to develop proj-ects which benefit society while promoting an environmental agenda. A list of projects and other information can be found on www.eco-gozo.com

plAnnIng For THE FUTUrE

The VFM Monthly Investment Plan provides investors with an excellent way to start planning for their future. Investing at an early stage is the key to meet any future long-term goals and best results are achieved if investors contribute on a regular basis. Whether you are a post-graduate starting your career and look-ing for a way to start investing or perhaps you have been earn-ing a regular salary for a while and wish to discipline yourself to develop a savings habit, VFM can offer a Monthly Investment Plan that fits your objective. By allocat-ing a small amount of your salary every month, you can easily start a Monthly Investment Plan.

poUnD coST AvErAgIng

The key point regarding pound cost averaging is that you invest

small amounts on a regular basis. This means that when prices are high, your monthly contribution may buy fewer units, but when prices are low, your investment buys more units.

vFm’S monTHly InvESTmEnT plAnS

You can start a VFM Monthly Investment Plan from as little as €1.66 a day, equivalent to €50* (or USD50 or GBP 30) a month and may redeem your plan on any dealing day. VFM’s Monthly Investment Plans allow investors to increase, decrease, suspend or cancel their monthly contribution as their financial circumstances may necessitate from time to time and enable you to have access to your investment at very short notice. Furthermore, you will have access to professional investment expertise managing the plan on your behalf.

Further information on VFM’s Monthly Investment Plans may be obtained from VFM, Bank of Valletta p.l.c. (‘BOV’) branches in Malta and Gozo or licensed Finan-cial Intermediaries.

Some of the opinions expressed herein should not be interpreted as investment advice.

*Investment in the Vilhena Med-iterranean Rim Fund is subject to the minimum lump sum invest-ment.

Past performance is not a guar-antee to future performance. The value of the investment may fall as well as rise and any initial and/or exit fees may lower the amount invested and the amount received upon redemptions. Investments should be based on the full details of the Prospectus, which may be obtained from VFM, BOV Branches or licensed Financial Intermediaries. VFM is licensed to provide Investment Services in Malta by the MFSA. All Funds managed by VFM are licensed as Collective Investment Schemes by the MFSA. The Vilhena Funds SICAV plc is licensed as a Collec-tive Investment Scheme qualifying as UCITS by the MFSA. Issued by VFM, TG Complex, Suite 2, Level 3, Brewery Street, Mriehel BKR3000. www.vfm.com.mt. Source: VFM.

FIMBank, the Malta-based spe-cialist trade finance bank, will be sponsoring the conservation of the nine monuments which adorn the Maglio Gardens in Floriana, better known to the Maltese as ‘il-Mall’. The project will be coor-dinated by Din l-Art Helwa.

The Maglio Gardens date back to the time of Grand Master Lasca-ris (1636-1657). It is recorded that he built the gardens as a recre-ational area for the Knights of St John, where they could indulge in pastimes including a game simi-lar to croquet, called ‘palamaglio’, hence the name. The gardens were opened to the public during the British period.

The monuments, which will be the focus of the conservation proj-ect, commemorate personalities who made an impact on Maltese society, namely Sir Luigi Preziosi, Sir Adrian Dingli, Sir Ugo Mifsud, Marquis Joseph Scicluna, Sir Hannibal Scicluna, Dr Filippo Sci-

berras, Marquis Vincenzo Bugeja, Aloisio Pisani and Giovanni Di Nicolo Pappaffy.

The implementation of the proj-ect, which is estimated to take between six and nine months, will commence once the required per-mits are in hand. Works on the various monuments will be tack-led according to their individual state of preservation, but will gen-erally address the effects of unfa-vourable atmospheric conditions, in particular the natural weather-ing process caused mainly by salt deposition, as well as the effects of vandalism.

Employers might have pre-conceived ideas about what is women’s work and what is men’s work. Maria Theresa Portelli from the National Commission for the Promotion of Equality (NCPE) explains how to find the most suit-able person for the job.

If an employer refuses to hire a woman with children, despite having the most suitable qualifica-tions and skills but recruits some-one else, then this is tantamount to gender discrimination in the workplace.

According to Article 4 in the Equality for Men and Women Act (Chapter 456) it is unlawful for any person to discriminate, either directly or indirectly:

- in the arrangements made to determine who should be offered employment;

-in determining who should be offered employment;

- in the terms and conditions on which the employment is offered, including pay and other benefits; and

- in determining who should be dismissed from employment.

It is imperative that all recruit-ment methods, documentation and publicity are non-discrimi-natory. Even when advertising a job vacancy, this should be non-discriminatory. While there might be exceptional instances when the publisher has no other choice but to specify that only a particular gender can be considered for the job, these instances are very rare,

for example, when employing a male or female for a script.

There are sensitive questions employers are not allowed to ask. Only questions that directly relate to the candidates’ ability to perform the job are permitted. Gender-related trends have to be avoided when deciding the eligibil-ity of an applicant for a particular job.

The process of recruitment and employment is one of the criteria that the National Commission for the Promotion of Equality (NCPE) assesses when certifying organ-isations as true equal opportuni-ties employers with the Equal-ity Mark. If you are interested in acquiring more information on the Equality Mark, visit NCPE’s website www.equality.gov.mt or contact us on [email protected] or 2590 3850.

The Equality Mark is part of the European Social Fund project and is co- financed through EU and Malta Government funds under Operational Programme 2 – Cohe-sion Policy 2007- 2013 – Investing in your future.


geTTing THe rigHT persOn fOr THe jOb


business newsMbb update

In the third Business Meets MEPs session, organised by the MBB, MEP Louis Grech stated that there is currently a lack of own-ership when it comes to oversee-ing the relaunch of the European Single Market and that the Euro-pean Union is not being aggres-sive enough to ensure the Union’s competitiveness on a global level. “There is broad consensus on the need to rethink the European Sin-gle Market, so as to ensure that it works for the citizen and for SMEs rather than the other way around. But there is currently a lack of clear leadership and ownership of the numerous initiatives that have been

adopted to ensure that the relaunch of the Single Market is a success. It is essential that both the European Commission, as well and member states, take ownership of this ini-tiative if it is to be successful,” he stated during the business session that was chaired by The Times jour-nalist, Joanna Ripard.

Mr Grech expressed his wish to see SMEs as the “prime mov-ers and shakers” within the Single Market, stating that action must be taken to ensure that access to the Single Market must be made easier for these business organisations.

Mr John A. Huber, President of the MBB, stated in his open-ing address that the time was ripe for more active discussion on the subject and a deeper understand-ing of the aims and objectives that the plans contained in the Single Market Act. “The Malta Business Bureau has not shied away from leading the discussion related to the Single Market Act in Malta and the original 50 proposals tabled by the European Commission have required extensive analysis,” he stated.

MBB Executive Mr Daniel Debono participated in a conference on Fundamental Social Rights and the Posting of Workers in the Frame-work of the Single Market in Brus-sels on 28-29th June, representing the Malta Business Bureau and BUSINESSEUROPE.

The free movement of workers is a pillar of freedoms guaran-teed by the Treaty of the European Union along with the freedom of movement of capital, goods and services. A worker is considered to be "a posted worker" when s/he is employed in one EU member state and is sent by their employer on a temporary basis to carry out work in another Member State. For instance, a service provider may win a contract in another country and send the respective employees there to carry out the contract. This trans-national provision of ser-vices, where employees are sent to work in a member state other than the one they usually work in, gives rise to a distinctive category, namely that of “posted workers”. This category does not include migrant workers who go to another member state to seek work and are employed there.

To guarantee that the rights and working conditions of a posted worker are protected throughout the European Union, and to avoid “social dumping” where foreign service providers can undercut local service providers because of lower labour standards, EU law established a core of man-datory rules regarding the terms and conditions of employment to be applied to an employee posted to work in another member state. These rules will reflect the stan-dards of local workers in the host Member State .

The idea is that where a member state has certain minimum terms and conditions of employment, these must also apply to workers posted to that State. However, there is nothing to stop the employer applying working conditions which are more favourable to workers such as, for instance, those of the sending member state.

Mr. Debono’s visit was funded by the European Commission.

Full article can be found on page 41.

The Commission has accepted MBB’s proposal for a project for HR Development in Family-Friendly Measures entitled SHIFT. This opportunity will allow partici-pants to obtain a first-hand expe-rience of best practices in their field as conducted in Germany and Denmark, two established coun-tries in this area. Such programme would prove to be vital for the economy as more family-friendly work environments and flexible work arrangements will encour-age productivity and efficiency at work places.

Via this project twenty HR Man-agers/Executives coming from the manufacturing, services and tour-ism industries will benefit from a two week visit in either Germany or Denmark. Participants will be hosted in various successful

businesses implementing family-friendly measures and flexible work arrangements. They will be job shadowing other professionals in the HR field gaining best prac-tice knowledge while enhancing their skills on how to conduct and manage such measures. After all visits would have been carried out, a high profile conference will be organised on the subject matter to further promote and encourage such initiatives on a national basis.

In the coming weeks the MBB will be issuing a call for those interested to participate in the programme through the Malta Chamber and MHRA. The mobil-ity visits will take place in March and May of 2012. For this project MBB has been awarded the sum of €47,504 by the European Union Programmes Agency.

The awarding of this project strengthens the MBB’s commit-ment to promote Maltese busi-nesses through EU funded proj-ects. This Leonardo Mobility (PLM) project entitled SHIFT adds to another major EU project recently awarded to the MBB. This refers to the LIFE+ Project entitled “Invest-ing in Water: Achieving Reduction in Water Consumption by Business in Malta”. The European Commis-sion LIFE+ Unit is co-financing €166,542 towards this project.

Furthermore, currently the MBB is also a key partner in the AMIE Project entitled “Ambas-sadors in Malta for Increasing Female Entrepreneurship” which is an awareness campaign pro-moting female entrepreneurship in Malta.

16th June

Business Meets MeP Louis Grech

20th JuLY MBB awarded another eu funded Project

28th June MBB executive ParticiPates in a conference deBatinG the PostinG of workers directive


Mbb updaTe

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Further information can be obtained by calling us on 2542 2020 or by e-mailing: [email protected]

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The Malta Business Bureau has launched a new EU infor-mation monthly update which briefs its members with latest developments on various new and ongoing EU policy initiatives covering draft legislation such as directives, regulations and recommendations currently dis-cussed within European Institu-tions. The issues covered by 'The Brussels Business Brief' are all topical and of direct interest to Maltese business. We trust that this new e-service will meet the demand for more 'real-time' information on the process lead-ing to the outcome of new EU rules affecting local business.

Following the successful launch of the ‘EU Tenders Alert’ in recent weeks, ‘The Brussels Business Brief’ will extend the number of e-services that are being coordinated by the MBB’s office in Brussels. The idea underpinning this e-service is to keep the Maltese business community in touch with Brus-sels and the developments tak-ing place in the heart of the EU. The MBB is clearly aware that

time means money and money means business. Consequently, the presentation of 'The Brus-sels Business Brief' is specifi-cally designed to provide a con-centration of information in as concise a manner as possible yet in a reader-friendly way so as to consume less time from busy agendas.

Informing is core in the MBB’s mission goals as is Safe-guarding and Promoting the Maltese business interest in the EU. Therefore, the impor-tance of these briefs report-ing ongoing development of EU rules is not only to inform, but also to receive feedback from our members and the business community at large in order for the MBB to endorse and put for-ward these concerns, whenever exerting influence in EU fora through our participation within our umbrella European busi-ness organisations.

This monthly e-service can be requested by sending an email to [email protected] or [email protected]

1st AuGust Launch of ‘the BrusseLs Business Brief’

Ms Paula Gera had the opportunity to attend the public hearing in cap-tion. The SBA is the first full strate-gic framework for SMEs providing a comprehensive SME policy frame-work, promoting entrepreneurship

and anchoring the ‘Think Small First’ principle in law and policy-making. However, not all member states are reported to be recognis-ing it in the appropriate way. SMEs should be seen as the norm rather

than the exception especially when taking into account that the 2020 strategy requires pro-active poli-cies to drive growth in the EU.

mbb rEprESEnTED AT Two pUblIc HEArIngS In brUSSElS:

ms gera and mr Seychell attended the referred public hearings whilst undergoing a traineeship period at the mbb's brussels office, offered to them by the malta business bureau.

28th JuLY

THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE’S (EESC) PUBLIC HEARING ON THE REVIEW OF THE SMALL BUSINESS ACT MBB Executive Mariella Sci-

cluna gave a presentation to the Federation of English Language Teaching Organisations Malta (FELTOM) members on the stan-dard 'CEN14804 Language Study Tour Providers-Requirements', giving an insight into the services and standards required within the competitive industry. The regulation covers areas such as the information provided that is required, such as staff qualifica-tions and training, accommoda-tion, leisure activities, the man-

agement of complaints and the liability insurance.

The presentation then moved on to look into student fund-ing, focusing mainly on the EU's Lifelong Learning Programme paying special attention to the Comenius Programme. A syn-opsis of the objectives of the pro-gramme, the services and bene-fits it provides, information about its target audience and the appli-cation and selection process was provided.

27th JuLY Presentation to feLtoM MeMBers: an insiGht into standardisation and eu fundinG oPPortunities for LanGuaGe schooLs

Mr Mark Seychell attended a public hearing on collective redress. The hearing served as an information and consultation session regarding the creation of a horizontal instru-ment on collective redress. Col-lective redress (remedy actions) is seen as a very broad concept, which

embraces both compensatory measures as well as relief through sanctions. As an alternative to col-lective redress, there are Alterna-tive Dispute Resolution schemes (ADR). There is no single form of ADR - it involves various tech-niques, including conciliation and

mediation. Each Member State also adopts the technique which suits it best. Therefore the general stance of the participants was very much in favour of minimum harmonisa-tion on a sector by sector basis, as sectors can differ widely from one to another.

12th JuLY

THE EUROPEAN PARLIAMENT’S PUBLIC HEARING ON COLLECTIVE REDRESS


Mbb updaTe

The MBB Executive Team and University Students undergoing a traineeship offered to them by the Malta Business Bureau.

From left to right: Mark Seychell, Clive Gerada, Elena Pace, Joe Tanti, Mariella Scicluna, Deborah Borg Brincat, Paula Gera, Clinton Camilleri, Emma Laferla, Laura Muscat and Daniel Debono

MBB teaM BuiLdinG event

Partnerships play an important part in successful projects. The concept is crucial to both EU-funded and independent actions to be both sustainable and effective.Various concepts have been devel-oped to further boost partnership, with Public-Private Partnerships (PPP) being promoted as a viable model. Other strategies, such as Corporate Social Responsibility (CSR) also highlight how private companies can contribute to the development of societies through cooperation with NGOs and Public organisations.

To this end, MBB and MEUSAC will be holding a national event entitled Promoting Sustainable Partnerships. This conference will serve as an introduction to both the PPP and CSR models. The aim of the event is to provide insight on how they can be effectively adopted by stakeholders within Maltese localities and communities.

A number of foreign and locally-based experts will be contributing to the conference’s proceedings. This is intended to provide practical

information on PPP and CSR whilst underlining the relevance of such initiatives in other EU countries. In addition, the conference will also serve as a platform for networking in bringing together businesses, local councils and NGOs to develop project ideas focusing on the fol-lowing sectors:

1. Environment 2. Culture and the Arts3. Social 4. Research, Innovation and ICT5. Infrastructure

The event will be held on Thurs-day, September 29th at the Phoe-nicia Hotel, Valletta from 14.00 - 18.45. Businesses interested in attending the conference may con-tact the MBB on [email protected].

The Malta Business Bureau is jointly organising a National Conference in conjunction with the Parliamentary Secretariat for Small Business on “Harness-ing Intellectual Property Protec-tion for Investment Promotion” as part of the SME Week 2011 activities. The event, which will take place at the MFCC in Ta’ Qali will welcome a number of international and local high pro-file speakers who will share their expertise in the field.

The aim of the conference is to generate a debate on the policy links between IPR and the gen-eral improvement of the invest-ment proposition package for Malta with the intent to develop a national patent policy fully-tuned to the needs of local business. The discussion will shed light on recent EU political developments

that should lead to a common unified EU Patent.

Parliamentary Secretary Hon. Jason Azzopardi will be opening the proceedings. Other speakers will include Mr. Nikolaus Thumm – Chief Economist, European Patents Office; Mr. Godwin Warr – Director General, Commerce Department; a senior policy expert from DG Internal Market and Services; and Mr. Vincent Tilman – Senior Advisor, Euro-chambres.

The MBB strongly encourages members of Malta Chamber and MHRA to participate in this event. For further information contact the MBB on [email protected]

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vent

s 29th sePteMBeRjoint MBB & Meusac nationaL conference on ProMotinG PuBLic-Private PartnershiPs

14th OCtOBeRnationaL conference on inteLLectuaL ProPerty Protection


T/ 21 320712E/ [email protected] Mallia Buildings

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Content House, composed of Content House (Advertising & PR), Content House (Publishing) and Content House (Investments) is one of the leading media companies in Malta. Founded in 2004 and with a staff complement of 17 dedicated employees on its books, last year Content House moved to larger, modern offices in Mriehel to cater for its existing and ever-growing business. Content House (Publishing) is responsible for some of Malta’s leading magazines and Content House (Advertising & PR) is an established communication agency and the local agency for Scholz & Friends, one of the largest advertising agencies in Europe.

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inTerVieW

asyluM

Just a few months ago, Malta was selected to host the European Asy-lum Support Office (EASO), which has been established with the aim of coordinating Member States’ asylum systems. The Office will be the first EU-level office to be hosted by the islands, which will act as an excel-lent base for the task at hand.

With easy access to main Euro-pean cities, an excellent infrastruc-ture, sound educational system,

multilingualism and an inherent interest in ensuring a coordinated effort towards more coherent migra-tion and asylum policies across Europe, Malta will become a second home to members of staff hailing from many European countries, and in many cases, also to their families.

According to Dr Robert Visser, the recently appointed Executive Direc-tor of the EASO, the establishment of the office will enable the EU to make

further progress towards a more comprehensive Common European Asylum System. Furthermore, it serves as a centre of expertise for Member States and will be able to better implement asylum legisla-tion, as well as the sharing of better practices.

The Office’s tasks can be divided into three main areas. First of all, it sees to the supporting of practi-cal cooperation on asylum. “This

involves a combination of activities including support for translation and interpretation, training of asylum officials as well as assisting in the relocation of recognised refugees,” Mr Visser explains.

Secondly, the EASO seeks to sup-port Member States under particular pressure, whereby teams of experts coordinate to assist EU countries to manage asylum applications and reception. “Consider the cur-

rent situation in Greece, whereby large influxes of asylum seekers created enormous backlogs. In this case, the EASO’s support teams will actively assist the Government to set up a new asylum service and a new reception service to reduce this backlog,” he explains.

“The third objective, which sees to contributing to the implementa-tion of the Common European Asy-lum System is the ‘umbrella’ task of

The european asylum support Office was established to increase solidarity among eu Member states and will assist them in fulfilling their european and international duties in the area of migration and asylum. business agenda interviews dr rOberT Visser, the newly appointed executive director of the agency, located in Malta.

& MigraTiOn WOrking TOWards sOlidariTyaMOng eu MeMber sTaTes


inTerVieWthe EASO,” Mr Visser maintains. This segment collects and exchanges information on best practices, it draws up an annual report on the asylum situation in the EU and it adopts technical documents, such as guidelines on the implementation of the Union’s asylum instruments.

Without a doubt, coordinating asy-lum policy across 27 EU Member States will certainly not be an easy task. However, as Mr Visser points out, within the operational frame-work of the EASO there will be a permanent staff of certain expertise, such as in documentation, analyses and coordination, which will allow the EASO to operate effectively. He forecasts that the expected staff complement will be at full capacity, with around 60 to 70 employees by the end of next year.

However, as it stands, the EASO is still currently in the process of ‘find-ing its feet’ in Malta, and Mr Visser anticipates that the Office will be fully operational within the next two years. As it is currently in its early stages, he has a number of goals and issues to see to during its first few years. “We have started off with absolutely nothing, so there are a number of things that need to be done including the setting up of our office,” Mr Visser says.

“We also need to make it a point to be fully active and operational as soon as possible. Nevertheless, we are already in full operation in cer-

tain areas, particularly in the sup-porting of Greece, whereby we have embarked on a two year programme to improve their side of the system and management. We also need to develop a number of projects of a more permanent nature such as the setting up of an asylum curriculum training programme for all the case workers in the Member States, as well as the setting up of a reporting document and an analyses report in order to assess the country of ori-gin – therefore countries were asy-lum seekers and illegal immigrants come from.”

In order to gain additional insight in the area of migration and asylum, Mr Visser is adamant on coordinat-ing work with NGOs. “They have a lot of expertise and are dedicated and active within the field,” he acknowl-edges. “They represent society and the population, and like Govern-ment entities they also benefit from hands-on experience.”

Meanwhile, paving the way for-ward for Mr Visser’s plans and expectations is his ambition, which consequently may also prove to be quite a challenge for the Director. “I want EASO to be perceived as an authorative centre, with a position of its own built upon added value for the Member State and the European Union as a whole. Furthermore, I would like to see it as an institute that is using the tax payers’ money in the best possible way,” he con-cludes.

“i want easO to be perceived as an authorative centre, with a position of its own built upon added value for the Member state and the european union as a whole.”


TOurisM indusTry

Malta’s hospitality industry plays an important economic role. However, players within the industry have expressed their concern that the need for higher quality skills could have a negative impact on the industry’s performance if these challenges are not addressed sooner, rather than later. business agenda explores the task at hand.

The hospitality industry in Malta plays an extremely important role in the local economy, employing thou-sands throughout the year, espe-cially during the summer months. The industry as a whole employs thousands of people; restaurants alone, across Malta and Gozo, employ almost 4,000 people.

However, despite the obvious impact that the industry has on Malta’s tourism product, on GDP and also on employment, several stakeholders have expressed their concern that the shortage of qual-ity skills in a number of areas may have a negative impact on the tour-ism industry.

The President of the Malta Hotels and Restaurants Association, Mr George Micallef, explains that based on the feedback provided by its members, the hospitality indus-try is suffering from a rather nega-tive perception amongst potential industry workers and as such, it is often difficult to recruit quality skills to fulfill certain vacancies. “It seems that there is a perception within the labour market that jobs within the industry do not offer long term career opportunities and do not offer good remuneration.”

While he acknowledges that this perception may be partly justified, as many job opportunities within the industry are seasonal, he states that the truth of the matter is that there are also many long-term opportunities for people in all areas of the hotel operation.

“There are many opportunities for people who want to grow within the industry, but the industry is a demanding one and employees need to be willing to work accord-ing to the industry’s demands,” he explains.

Mr Micallef continues to explain that there are many skills in demand, including front office, housekeeping, technicians and also within the Food and Beverage sec-tions; but it is proving particularly difficult to recruit personnel with all the required skills, particularly when it comes to sales and market-ing, technicians and culinary ser-vices.

“The industry requires employ-ees to have a broad skills base. Not only must they be willing to work at odd hours, but they must also have a very strong work ethic, be good with languages and above all

else, they must have an excellent approach to customer care,” Mr Micallef states.

“It is certainly not easy to recruit employees who offer all of these broad skills, especially with the prevailing, yet mistaken, perception that the industry offers few long-term career opportunities,” he con-cludes.

brIDgIng THE gAp

Ms Claire Xuereb, Chairperson of the Institute of Tourism Studies, agrees with the assessment that the hospitality industry is suffering from the perception that jobs within the industry do not offer long term career opportunities. “One of our main aims at ITS is to change this perception. Some people still think that we are a hotel and catering school, which basically focuses on kitchen and service, but this is not the case – we prepare our students for career paths within the indus-try,” she explains.

She states that at the pres-ent time, interpersonal skills and flexibility are in very high demand across the board. “All of the skills are very important in any career

sHOrTage Of cerTain skills

needs TO be addressed

HOspiTaliTy indusTry:

Mr George Micallef


TOurisM indusTry

“We must work hard to gain a competitive edge and we need to re-instill this drive into all our labour force. We need to remind everyone that our industry does not only offer many jobs, but it also offers many interesting career paths, which are also useful in other industries, hence, making our sector even more attractive.” _ Ms Claire Xuereb

path but it is useless to have the greatest skills in service when we are not able to adapt to different sit-uations and be able to consistently deliver the new service promise. We are living in a very dynamic indus-try. Our employees need to have all those skills that will allow them to understand and adapt well.”

Ms Xuereb states that there is currently a lack of these inter-personal skills and flexibility, and states that since the hospitality industry has become extremely dynamic, a high level of staff turn-over has become a reality. “At ITS we are working on preparing our students with a wider skills base – staff within the industry need to be able to self-supervise and to notice

any deficiencies, bring them for-ward, find solutions and implement them in the most practical man-ner,” she explains.

She says that in general, the hos-pitality industry has been taken for granted, but in today’s competitive industry, one cannot assume that visitors will keep coming and will keep finding the country interest-ing. “We must work hard to gain a competitive edge and we need to re-instill this drive into all our labour force. We need to remind everyone that our industry does not only offer many jobs, but it also offers many interesting career paths, which are also useful in other industries, hence, making our sector even more attractive.”

To reach this objective, the Insti-tute has revised its curriculum to reflect the demands of industry and will soon launch some part-time courses which offer lifelong learning opportunities to those already employed within the indus-try. “We also aim to make industry a key stakeholder of ITS - industry’s presence inside the Institute has to be very prominent, through guest lecturing and activities for career opportunities. Students’ presence within the industry also needs to be enhanced through onsite visits related to particular courses, more effective work placements, and more knowledge on the whole, on what is happening out there,” she concludes.

Ms Claire Xuereb


THe pOssible iMpacTs Of THe

enVirOnMenT

a new commission proposal for a directive on energy efficiency has been adopted with the intention for the eu to reach one of the three 2020 climate change-related targets. OMar cuTajar, permanent representative of the Malta business bureau in brussels, discusses what impact the directive could have on the Maltese business community.

energy efficiencydirecTiVe

According to proposals published by the European Commission, the EU is to achieve a 20 per cent reduction in its energy consumption by 2020. This target complements the man-datory requirement to achieve a 20 per cent increment in the share of renewable energy as well as a 20 per cent emissions reduction.

The European Commission is making the case that the new draft directive will introduce simple yet ambitious measures aimed to deliver a strong impetus to energy savings and energy efficiency. The initiative is being acclaimed as a timely move to deliver on the com-petitiveness-related challenges ensuing from the EU’s own strin-gent climate-change targets, the sporadic unreliability of energy supplies, very often spurred by the emergence of political instability in the supplying countries in the east and southern peripheries of Europe.

Going beyond policy issues and high-level politics, the increas-ing operational costs registered by energy-intensive industries weighs in heavily on the motivation why EU legislation is being pursued

to leverage greater investment in energy efficiency schemes. From a business viewpoint, the logic of cost savings is self-evident. It pays to invest in energy efficiency for in an economic context of higher energy costs, any industrial, tourism and retail commercial operation stands to gain if it saves on its energy bills. In practical terms, it translates into a lighter balance sheet.

bInDIng or volUnTAry TArgETS?

There is overwhelming consen-sus on the merits of driving forward energy efficiency amongst both the public and private sectors at an EU level. Divergence of opinion how-ever rages on the issue of whether obligatory rather than voluntary tar-gets should have been set within the scope of the new directive.

In fact, the draft directive sets in a legal obligation to establish energy saving schemes in all EU mem-ber-states with energy distributors or retail energy sales companies obliged to save every year 1.5 per cent of their energy sales by vol-ume. However, this target is not a


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binding one but only an indicative one conceived as a means to stimulate a greater uptake of energy efficient practices in businesses and house-holds. An assessment on the need for binding targets based on progress achieved will be made in 2014.

The prevailing opinion amongst business lobby organisations, includ-ing Eurochambres and BUSINES-SEUROPE, is that an incentive-driven approach aimed at fostering the sup-ply of energy-efficient services whilst facilitating the uptake of energy effi-cient investments by buttressing the upfront costs, by both the public and private sectors is the preferred approach.

In a press statement, issued on the day of the release of the Commis-sion proposals, Arnaldo Abruzzini, the Secretary General of Eurochambres, commented that “proposing manda-tory measures would be inconsistent with this approach and would create unnecessary administrative burdens”. This is a viewpoint fully shared by Maltese business in so far that it does address the specific realities of the smaller business categories. Public authorities should not heist the same kind of energy-efficiency obligations on SMEs as with larger corporate set-ups. With this view in mind, it is deemed appropriate, that for SMEs, the Commission is putting the empha-sis on providing flexible incentives and better targeted information in order to support the uptake of energy audits and investments in energy efficiency.


new clear parameters will be needed to guide public procurement practices in Malta in order to ensure the delivery by private operators to public authorities of the requisite energy-efficient products, services and equipment. a ‘life-cycle costing’ approach that fully takes into account all the costs incurred during the lifetime of the required products or services is recommended to be set as the guiding principle in procurement evaluation.

THE rolE oF THE pUblIc SEcTor

It is against this background, that a key element of the new provisions contained within the draft directive puts the onus of leadership onto the public sector. Public organisations will be providing for the push factor driving the market uptake of energy efficient products and services via a legal obligation to purchase energy efficient products and services. The directive will require governments to double the current level of retro-fitting of public sector buildings to 3 per cent a year.

This is an important positive development from an economic perspective as the introduction of this directive will spur a surge in demand for construction renovation works with concomitant demand for energy-efficient equipments and installations. A quick adoption of the Commission’s draft text via the co-decision procedure involving the European Parliament and the Coun-cil would ensure a demand boost at a time when the construction business is stabilising as a result of the international financial cri-sis. Demand for Maltese upmarket property has sapped over the recent past due to a detectable slack in demand by foreign buyers.

The renovation obligation on the public sector (making up close to 12 per cent of the EU building stock) would also serve a strong driver for higher uptake of energy efficiency in other economic sectors. It would therefore contribute to the devel-opment of the requisite skills and knowledge base amongst the local construction companies and equip-ment providers whilst creating new business opportunities and jobs.

THE nEED For THE rIgHT mArkET ApproAcH

In this matter, it will be critical to ensure the existence of an EU-wide competitive market for energy-effi-cient products and services. Public procurement is the best available instrument to instil the demand and the local market availability of these products. New clear param-eters will be needed to guide pub-lic procurement practices in Malta in order to ensure the delivery by private operators to public authori-ties of the requisite energy-efficient products, services and equipment. A ‘life-cycle costing’ approach that fully takes into account all the costs incurred during the lifetime of the required products or services is rec-ommended to be set as the guiding principle in procurement evaluation.

Maltese business is confident that with a decisive supply-side driven approach, based and sus-tained upon a market-lead by the public sector, market demand will surely boost in the energy efficiency market. This should ensure that the new EU directive on energy effi-ciency would pay its dividends for a vast cross-section of local economic operators irrespective of whether the targets will be of a binding or a voluntary nature after the ear-marked implementation assess-ment date of mid-2014.

enVirOnMenT


eu pOlicy

THe pOsTing Of WOrkers direcTiVe:

ecOnOMic freedOMs sOcial rigHTs

The Posting of Workers Direc-tive (PWD) is topping the European agenda following the European Com-mission’s commitment to improve this legislation as part of its over-all plans to relaunch the European Single Market and to facilitate the movement of workers in the EU. The PWD addresses the internal market for services and proposes concrete measures to clarify complex national administrative procedures as well as double-taxation issues that ham-per the cross-border movement of workers.

Formally adopted in December 1996, the PWD was meant to safe-guard temporary workers who move to other member states for tem-porary employment. Such workers are entitled to the minimum stan-dards provided for in the host states, including working hours, holidays, minimum pay, health and safety, equal treatment and non-discrimi-nation. However this excludes issues concerning dismissals and those relating to workers’ representation.

wHAT ArE THE SocIo-EconomIc EFFEcTS oF poSTED workErS?

Studies indicate that in 2007, there were 1.3 million posted work-ers within the EU-27 and EFTA countries. The majority of postings

originate from new member states and are mostly concentrated in the EU-15 and EFTA countries. Poland is the highest sender of posted workers. In recent years, temporary employment has shown an increas-ing trend; however there was a sharp drop between 2008 and 2009 mainly due to the international economic crisis.

The social effect on the labour market is that posted workers are likely to improve their employabil-ity by gaining new skills and expe-riences. Notwithstanding the ben-efits of such an opportunity it is believed that the personal family life of posted workers is more prone to be adversely affected. In addition it is argued that when workers move intra-company, the overall develop-ment of the company benefits. On the other hand when a move takes place in-between companies, the receiving firms enjoy a lower labour cost, while posted workers enjoy higher earnings. In the light of this argument, trade unions argue that the spirit of this Directive gives the impression that the EU tolerates social dumping. On the other hand employers’ organisations tend to disagree.

How DoES THE pwD AFFEcT mAlTA?

The posted workers’ phenomenon is a reality across the EU, including Malta. Mr George Camilleri, Manager within the Department of Industrial and Employment Relations, notes that such occurrences are expanding within the Maltese labour market – the main reason being the increasing awareness of the rights of free move-ment of services and workers within the EU. Mr. Camilleri confirmes that information received from posting undertakings at the Department of Industrial and Employment Rela-tions, shows that the number of post-ings to Malta has more than doubled between 2010 and 2011.

On restrictions to post employees to Malta, Mr Camilleri claims that there are no procedural barriers hindering this type of movement of workers. However one needs to high-light that the PWD is only applicable to employees working for companies established in the EEA countries.

Despite there being no restric-tions barring entry to posted work-ers in Malta, certain procedures need to be respected. The sending firm is obliged to notify the Department of Industrial and Employment Relations of the respective posted employees. This enables the Department to ver-ify that “while the posted worker is in Malta, the foreign undertaking guar-

antees the minimum conditions of employment that are generally appli-cable in Malta for the sector in which the work is carried out,” Mr Camilleri concludes.

wHy HAS THE pwD gEnErATED SUcH A HEATED DEbATE In THE EU?

Following a number of European Court of Justice (ECJ) rulings on PWD interpretations in recent years, a debate was sparked off within the EU’s civil society on whether existing legislation promotes social dumping instead of a highly competitive social market economy. Critics blame the current diverse employment condi-tions and industrial relations sys-tems across the EU for this, while objecting to the Court’s decisions. Proponents for a revision of the PWD, including the ETUC and trade unions in general, argue that there is a need to establish specific rules guarantee-ing a level playing field for citizens and businesses while providing the appropriate level of minimum pro-tection of workers’ rights and trade unions’ right to collective action.

On the other hand, BUSINESSEU-ROPE and other employers’ organ-isations welcomed the Court rulings, claiming that this leads to a consoli-dation of the Single Market. They

argue that while collective action is a fundamental right, so is the freedom of establishment and to provide ser-vices. Thus as the ECJ observed, any industrial action should have a legiti-mate objective and should not go beyond what is necessary to obtain this.

In his report to the European Commission, Professor Mario Monti recognised that ECJ rulings “have exposed the fault lines that run between the single market and the social dimension at a national level.” Despite Professor Monti’s recom-mendations to strengthen the dis-semination of information and to guarantee the right to strike, the Commission only endorsed the sug-gestions partially. In its final docu-ment indicating the twelve initia-tives that would boost growth and strengthen confidence in the Euro-pean economy, the European Com-mission only committed itself to improving the PWD and to clarify the exercise of freedom of establishment and the freedom to provide services, while strengthening fundamental social rights.

Mr Debono is an executive within the Malta Business Bureau while Ms Pace is undergoing a traineeship with the organisation.

daniel debOnO and elena pace, take a look at the current debate surrounding the provisions of the posting Workers directive.

vs.


eesc updaTe

THe fuTure Of On-line gaMbling in THe eu:WHicHWay?fOrWard

following the publication of the commission’s green paper on regulating On-line gambling, the european economic and social committee organised a public Hearing to discuss the way forward with concerned stakeholders. sTefanO Mallia and OMar cuTajar report on the main points of discussion.

Following the publication of the Commission’s Green Paper on Reg-ulating On-line Gambling, the Euro-pean Economic and Social Commit-tee has taken the bull by the horns and organised a Public Hearing to discuss the main issues raised in the Green Paper. The hearing was addressed by several experts, including representatives from the European Commission, the Euro-pean Parliament and the EESC’s Rapporteur on the Commission’s Green Paper, Mr Stefano Mallia. The well-attended meeting had par-

ticipants representing regulatory authorities, sports associations, payment solutions firms, private operators and some on-line gaming companies.

Mrs Pamela Brunter-Coret, Acting Director, DG Markt gave a short brief on the Green Paper and explained the policy backdrop against which the Green Paper was launched. The economic signifi-cance of the On-line Gambling sec-tor has grown in the past decade. An internal market dimension came

into play as the expected revenue returns point towards an even more significant growth of the industry.

One of the main objectives, as stated in the Green Paper is to bat-tle fraudulent activities and protect consumers betting on-line. How-ever, the recent Directive on E-Con-sumer Protection excludes on-line gambling from the spectrum of ser-vices that fall within its scope.

Concurrently, different regulatory schemes that are present across

the EU Regulatory framework could not be more diverse, varying from total prohibition or tight regulation to completely liberalised markets. The business models, as well, vary from monopolies to mixed systems. These were the regulatory consid-erations that the Commission had to consider in launching the Green Paper. The main objective, however, was to gather information and to stimulate a public debate on how best to address cross-border legal uncertainty and the growing market share registered by on-line gaming.

German MEP and EP Rapporteur, Mr Jürgen Creutzmann presented the position of the European Parlia-ment’s IMCO Committee on on-line gambling after the launch of the Green Paper. Mr Creutzmann’s draft report has received a considerable number of amendments that will be the subject of political compromises amongst the political groups.

In Mr Creutzmann’s words it has been proven that regulation does not work. Therefore, there is a call for minimum harmonisation cov-


eesc updaTe

ering the on-line gambling sector. The EP opinion also addresses the definition of gambling fraud. On this issue, MEP Creutzmann stated that Member States should be able to decide on the level of enforcement in full respect of the subsidiarity principle.

Mr Creutzmann presented a threefold action plan: a directive setting either minimum or maxi-mum harmonisation; the inception of a transparent and non-discrim-inatory EU-wide license should be

available; the tax revenues should contribute to the funding of public activities, whereas IPR (Intellectual Property Rights) should be aptly protected in relation to sporting activities.

MEP Creutzmann also stressed the positive cooperation with EESC Rapporteur and Maltese Chamber of Commerce Vice President, Ste-fano Mallia. He expressed strong support for the Opinion as prepared by Mr. Mallia, stating that “I think the position of the EESC Rapporteur is

very balanced and very close to my draft report with regard to the main points. In addition, it also includes some interesting new ideas.”

In his intervention, Mr Mal-lia stressed that the reality of on-line gambling could simply not be ignored. As any other industry, it has its own regulatory gaps. There is a need for EU-wide action, since separate, individual action by mem-ber states is not a viable option, especially in the area of consumer protection. On this Mr Mallia said that “there is a need for an EU-wide action – the current status-quo is not on. I want an EU-wide frame-work that offers a minimum – not low – level of protection for con-sumers. But member states should be able to go further if they want.”

The draft EESC Opinion as pre-sented by Mr Mallia says that the logic of the internal market should be at the driving seat of forthcoming EU action. Significant effort should be dedicated to securing the protec-tion of minors and other vulnerable groups. EU regulation should be designed to deal with concurrently disparate legislative and licensing requirements whilst enforcing a minimum, though not low, thresh-old for consumer protection.

In the Opinion Mr Mallia proposes that every member state should be able to add on the necessary mea-sures. A so-called ‘white list’ of licensed operators would provide the consumers with the requisite legal protection.

Member States should avoid duplication of conditions, by over-coming the mistrust and make it as easy as possible for the operators to obtain the license. A few proposals were put in place. The creation of an EU framework for consumer pro-tection legislation and the setting up of unique EU-secure Gambling Marks constitute some of the pro-posed suggestions. Other proposi-tions include formalising the struc-ture of inter-state cooperation at EU level between Member States and extending the scope of the Money Laundering Directive.

The hearing was characterised by several speeches and interventions from the floor in reaction to the presentations by the official speak-ers. Different views were expressed and some conflicting opinions also emerged.

The discussion on the regulation of on-line gambling is gathering pace and it is expected that by the end of October, both the EESC and the European Parliament would have adopted their opinion and report respectively in response to the Commission’s Green Paper. On the basis of the evaluation of these responses the Commission will then decide on the legislative course of action for the on-line gaming indus-try in the European Single Market.


business adVisOry serVices can paVe THe Way TO success Strategic planning is a crucial ele-ment for any business’ survival and long-term sustainability, even more so in the context of today’s eco-nomic challenges brought about by globalisation, which have made it all the more difficult to maintain a high level of competitiveness.

Numerous entrepreneurs face the predicament of trying to achieve fast growth and simultaneously making the best use of their pres-ent resources. Hence, it is inevitable that when one is trying to plan, one faces a lot of challenges and needs to identify a number of options and alternatives so as to deal with the related issues.

Locally, around 95 per cent of businesses are micro enterprises employing less than ten work-ers, meaning that quite often there is a difficulty to allocate time and resources specifically for strate-gic planning, whilst the personnel might not be able to look at their own operations from an outsider’s

point of view to see how these can be improved.

Malta Enterprise has recognised this reality and consequently set up the Business Advisory Service, whereby it contracts professional consultants to assist organisations in recognising and dealing with the challenges of running a business and supporting them in identify-ing strengths and overcome weak-nesses in specific areas.

Conscious of the fact that busi-ness priorities change in relation to various factors that include the socio-economic environment and the age of the enterprise, the team of business consultants have the capabilities to address the needs of the companies at the various stages of their development.

Indeed, while a start-up company may prioritise funding and market entry, a more established enter-prise might prioritise new market penetration, change management, R&D and innovation, or corporate

governance – all of which are areas in which the consultants can provide professional advice and assist the company in its strategic planning.

Areas of expertise include, but are not limited to, start-up support, business planning, international competitiveness, market develop-ment, human resources manage-ment, product and service devel-opment, quality improvements and certifications, and a number of audits such as energy and environ-ment audits in order to make enter-prises more efficient.

Promoting such services has become all the more important for Maltese businesses. Eurostat sta-tistics point out to Malta having one of the lowest rates of new start-up companies in the EU, standing at 2.2 per cent per year. At the same time, the size of Malta’s market coupled with events happening in the North African and Middle East region have led Maltese enterprises to seek new opportunities abroad and to interna-tionalise. This is all the more impor-

tant when considering that gen-erally internationally active SMEs report an employment growth of 7 per cent versus only 1 per cent for SMEs not involved in any interna-tional activity, and at the same time, they tend to be more innovative.

For those who have not previ-ously considered seeking business consultancy because of the related costs, the service offered by Malta Enterprise offers the first 10 hours free of charge, thereby making the service accessible to a wider spec-trum of companies. During these hours, Malta Enterprise’s contrac-tual consultants meet up with the interested enterprises, to discuss in confidence the obstacles being encountered in their projects and come up with a set of recommenda-tions to help them overcome their stumbling blocks.

The service however can be extended further at the client’s request, with the consultants build-ing up on the initial support and providing more focused consul-

tancy, support and handholding that should facilitate companies to maintain their competitiveness and develop new market and business growth opportunities. The addi-tional hours can be made available at a subsidised rate.

Through the assistance to maxi-mise the use of their resources, the returns for Maltese businesses that avail themselves of the Busi-ness Advisory Services are poten-tially high. Suffice to mention as an example that for every euro that a business invests in an energy audit to reduce its energy consumption it can typically save up to seven euro from its expenses. Similarly, con-sultation and professional assis-tance on internationalisation or product development can lead to an increase in returns for the benefit of the business that invests in them.

businesses interested in receiv-ing advisory services can contact malta Enterprise on 2542 0000.

business

business agenda issue 08

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