Malta was "one step away from EU membership" after being told it could conclude accession talks in December and join in 2004, Foreign Minister Joe Borg said yesterday.

The European Commission yesterday released a report called "Towards an Enlarged Union", in which Malta was named as one of the 10 candidate countries able to assume the obligations of membership within the envisaged time frame.

The commission said negotiations would be concluded by the end of the year and the 10 countries would be ready for membership from the beginning of 2004.

Bulgaria and Romania will have to wait at least until 2007 because of their economic weaknesses, while Turkey is not yet deemed ready to start talks on entry.

The commission also published a progress report on each candidate country, and the Malta report was yesterday presented to Prime Minister Eddie Fenech Adami at Castille by EU chief negotiator for Malta Arhi Palosuo and the head of the EU delegation in Malta Ronald Gallimore.

Dr Fenech Adami said at the presentation that the report on Malta showed the huge progress that had been made by the country in the implementation of the acquis. He said the Maltese were now feeling the effects of this exercise, which had had a positive impact overall.

"The report mentions areas where more work still needs to be done but overall it paves the path to membership in 2004... as long as the people will decide to vote for that option," he said.

In a press conference at the foreign ministry later, Dr Borg said the report reaffirmed that Malta had fulfilled the political and economic criteria for membership.

"With regard to the administrative capacity and the implementation of the acquis, I would say we have scored well on most of the chapters although there are certain areas where the report indicates that we need to do more, with particular reference to agriculture, and to a lesser extent to fisheries, social policy, environment and taxation," the foreign minister said.

"All the other areas of the acquis have been described as being in good shape or the progress registered in them as being sufficiently good. It is only in these specific areas that we need to increase the pace of adaptation.

"The commission's strategy report as well as the report on Malta have confirmed that we are very much on the road to membership.

"One augurs that negotiations will be concluded by the time of the Copenhagen European Summit so that this will be followed by the signing of the accession treaty which, the report says, should be ready from six to eight weeks after the conclusion of negotiations."

Speaking at the press conference, Mr Palosuo said it was crucial that Malta was one of the countries that had now been classified as an "acceding country".

He said the commission was envisaging that the accession treaties would be signed in the spring of 2003, to give time for the ratification process to take place in the member states.

Mr Gallimore said that this was the last time the commission was issuing a regular report on Malta. Next year, six months before accession, the commission would issue a final monitoring report.

He clarified that the report did not touch upon the negotiations but was concerned with the political and economic criteria, as well as with capacity building in preparation for membership.

The report on Malta, he said, showed that the island had made a lot of progress but at the same time there was still work that needed to be done in specific areas. He mentioned agriculture, environment and transport as areas where particular attention was required.

In its enlargement report, the European Commission says that Malta, along with nine other countries, has reached a high level of alignment with the EU acquis and has made considerable advances towards ensuring adequate administrative and judicial capacity.

The report says that the decision to refer to the 10 countries as "acceding countries" was taken in view of their track record in implementing the commitments they had made in the negotiations and took into account their preparatory work in progress.

Once the negotiations are concluded, the drafting of the treaties would need to be finalised in order to incorporate them in the final results of the negotiations.

The treaties are expected to be finalised by not later than six weeks after the conclusion of the negotiations and they are expected to contain a date for the accession of the new member states.

The European Commission has also recommended participation by the acceding countries in the work of the EU before accession including in all committees chaired by the commission.

The commission considers that acceding states should also be able to participate at least as observers in the relevant structures of all community agencies and bodies.

The report on Malta has reaffirmed that the island is a functioning market economy and that it should be able to cope with competitive pressure and market forces within the EU.

It says that Malta's macroeconomic performance has improved since 1997, although economic activity slowed down markedly in 2001, largely as a result of the downturn in international demand. Structural reforms are underway in several sectors, although progress has sometimes been slow and reforms need to be completed.

The report describes Malta's income levels as having remained constant in relation to the EU average.

Malta, it says, has a relatively low economic activity rate, at 58 per cent in 2001, and a very low female participation rate in the labour market. The total employment rate in 2001 was 54.2 per cent, which hides a very low employment rate for women at 31.6 per cent, compared to 76.4 per cent for men.

Higher female participation would allow the economy to confront labour shortages in some sectors, the report suggests.

It says the existence of a functioning market economy requires that prices, as well as trade, are liberalised and that an enforceable legal system, including property rights, is in place.

According to the report, there is a broad consensus on the fundamentals of economic policy, though the divergence of opinion on EU accession between the two main political parties creates uncertainty about the continuation of certain reforms.

There is overall consensus about the need for economic reforms such as reducing subsidies to loss-making public enterprises or increasing efficiency in the public sector, but it is unclear, says the report, whether some areas of reform which are particularly linked to EU membership would keep up their momentum under a change of government.

The report expresses satisfaction at the government's track record in keeping to announced polices, even though some of them have not progressed at the expected pace.

It says the declining trend of the general deficit was interrupted in 2001, though the government remains committed to consolidating public finances.

The increasingly liberalised macroeconomic environment, according to the report, raises new challenges for the policy mix.

The private sector has slightly increased its weight in the economy since 1997 and has been dynamic as regards job creation, but the public sector still absorbs a high share of total employment.

The report views the privatisation of public enterprises as remaining slow, despite substantial progress in the banking sector and the partial privatisation of telecommunications and postal services and the airport. Privatisation of the banking sector has been largely completed, and competition is relatively high despite the economy's small size.

Foreign direct investment flows have to a large extent financed the current account deficits, but they have depended significantly on one-off factors. FDI fell significantly in 2001.

There are no significant barriers to market entry or exit in Malta and the legal framework supports the functioning of the market economy, says the report.

The financial sector is becoming more developed, the regulatory and supervisory environment has been strengthened, and financial diversification has increased in the wake of capital liberalisation.

The restructuring process of public and private enterprises is ongoing, though the process is in general more advanced in the private sector.

The degree to which government policy affects competitiveness has been reduced, but further efforts are necessary to decrease subsidies to public enterprises and utilities.

Malta, says the report, is a very open economy that is well integrated in terms of trade with the EU.

On the chapter dealing with company law, the report refers to the issue of intellectual and industrial property rights, saying no legislative progress can be reported.

It says the police have continued to carry out some inspections at various localities and have made limited seizures of counterfeit goods during the past year, but the government is urged to urgently tackle the high level of piracy and counterfeiting, by further strengthening the enforcement and monitoring capacity of the competent authorities.

On the chapter dealing with competition, the report says that negotiations are still going on and that the compatibility of the aid granted to the shipyards needs to be ensured.

With regard to transport, the report says that there has been little progress over the past year, and the progress has been mainly in the field of maritime transport. Malta has still to transpose considerable parts of the acquis.

There has been some legislative progress in agriculture, but little progress in terms of administrative capacity. Malta still has to adopt considerable parts of the agriculture acquis, and in order to be ready for membership it also needs to give urgent attention to the restructuring policies associated with the dismantling of levies and to the devolving of marketing responsibilities from the state to the farmers.

With regard to fisheries, the report says Malta needs to finalise the alignment of legislation with the acquis and to implement fully its plans for substantial strengthening of its administrative capacity.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.