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One year on is the time to do a European reality check. A time to analyse our European membership and performance.
Is Malta an active participant in the enlarged process? Are government departments handling the process well?
Should the social partners be more active in the EU process?
Are we concentrating too much on acquiring funds and too little on maximising the opportunities open to us?
Are we managing to apply for funds in time?
In short, are we being reactive and just waiting for opportunities to fall onto our lap?
Early days perhaps, yet the absence of visible deliverables and the lack of a clear communications strategy making Europe better known to the average citizen is more than obvious.
Following May 1 2004; a new political landscape has started being drawn.
Managing this new reality is crucial.
The Labour party in an exercise of real politik barring a few internal dissenters has readjusted its policy to the new European reality.
Countless directives and regulations have entered our statute book. The European project has brought changes opportunities and pain. On a positive note Europe has heralded a number of freedoms introducing the liberal transfer of movement and capital.
On paper the Maltese can now live and work abroad, supposedly pay cheaper European university fees, freely transfer their hard earned savings abroad and benefit from medical treatment abroad.
Throughout Europe all Maltese are to be treated as equals to any other European. On a political level the country is now anchored in the European family of democracies, which ensures that no abuses of our democratic rights should ever take place again.
This gives any individual the right to lodge complaints in European for and enhances our democratic safety net and credentials. No mean achievement.
On the economic plain, Europe perceived as the trigger for structural reform has been a standard setter not without bouts of pain. The standards set in health and safety, car regulations and environmental care all have long-term positive benefits.
Some measures introduced, however, have left a bitter taste and increased business costs at a time of economic stagnation. Too many economic reforms have been introduced in too short a time and in an insensitive way. Caution would have advised a softer European landing yet the regulations and directives introduced have had a crash landing effect.
The EU has undoubtedly put pressure on Malta to reduce its deficit, and the increase in the VAT rate to eighteen percent.
And the introduction of eco-taxation, the removal of holidays falling on weekends and the imposition of the surcharge on utilities were all done without winning the hearts and minds of the electorate and to make matters worse have been linked with European Union accession.
Any reforms that lead to making Malta’s economy more competitive constitute a positive direct result of EU entry and are in keeping with the new reality that fiscal policy is now EU driven with Brussels monitoring and benchmarking our performance.
Dr Gonzi’s room for manoeuvre is limited. Our economy, fiscal and monetary policy is under constant watch by European structures.
We are now accountable economically to Europe and can be rebuffed and publicly censured by Europe if we do not keep to set and agreed guidelines.
Ecofin is fast becoming a household word. This imposed fiscal discipline is a positive development. After all Maltese politicians of either colour have been too willing to keep sugaring the electorate. The reasons for joining were always primarily political especially after the abuses our politicians.
It was always clear to all independent minded persons that economically joining Europe would result in immediate pain and long term gain. In fairness the future benefits were packaged in the rallying call ghall-uliedna (for the benefit of our children).
Our economy is not competitive and in addressing this problem pain is inevitable.
Europe however does create opportunities, which we may not be sufficiently aware of.
We are now operating in a market of four hundred million people and no longer four hundred thousand. The country has qualified for Objective One status. Yet even this achievement was very badly sold by government, allowing it to be tripped up by GWU media claims that the agreement was already in the bag.
Dr Gonzi is still in search of a rallying call. Lacking a big idea like independence, a republic and Europe, it is finding it difficult to win hearts and minds around its political programme of modernising the country.
Disraeli had said ‘change is inevitable in a changing society, change is constant’. The country is finding it difficult to operate in our changing environment subject to strong competitive pressures. It is also finding it difficult to compete with the growing economies of the Far East.
Dr Gonzi must put in place the climate that enables our businesses to compete.
Getting and focusing on our deficit is correct, but equal emphasis must be placed on growth. We all presumed that growth would be inevitable once we joined Europe. We were assured that enhanced trade, foreign direct investment flows and access to EU funds would be immediate. We are much wiser now in realising that the opening up of markets does not result in instant growth.
The key to growth is competition and government has a role to play by minimising costs to business which regrettably have increased since membership.
One year down the line, managing change remains the biggest challenge facing our society.
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