Lisbon agenda debate

Government urged to draw up action plan, appoint coordinator

Nationalist MP Mario de Marco has urged the government to draw up a national action plan on the Lisbon agenda and also appoint a national coordinator to implement it.

Speaking during the parliamentary debate on the Libson agenda yesterday, he recalled that the Lisbon agenda targets were set in the spring of 2000 by the then EU15 with the ultimate aim of matching the economic growth rate of the US at three per cent. The targets included higher productivity, a higher employment rate, greater emphasis on research, innovation and entrepreneurship, and a stronger and more effective internal market.

Unfortunately, the past four years had not been good for the targets to be achieved. The dot com bubble had burst, there were major financial scandals, terrorist attacks in New York and Madrid, and EU enlargement which raised the EU population by 20 per cent without corresponding GDP growth.

There were also new external factors, such as the sharp economic growth of China and India, the former becoming a strong pull for industrial investment which would otherwise have gone to Europe, and the latter for offshoring and outsourcing.

This, however, did not mean that the EU should abandon its Lisbon targets. Indeed, aiming for those targets was more important now than before because failure to achieve them would put the sustainability of the European social model in jeopardy.

As former Dutch Prime Minister Wim Kok said in the agenda review in November, the Lisbon agenda was the best response there could be for the challenges which Europe faced.

The problem, Dr de Marco said, was that the Lisbon agenda was so wide, not many understood it and no one felt responsible for its implementation. It involved everybody, and nobody.

The fact was that successful implementation of the agenda targets was not dependant on the EU's institutions, but on the institutions of the member states.

Structural reforms were needed across the EU in order to release the bloc's economic potential. But there had to be recognition that countries were starting the race from different positions on the grid. The Lisbon agenda scoreboard had to be interpreted in this context.

He felt the member states should concentrate on a few specific sectors. These were the development of a knowledge-based society, the development of the internal market with a better environment for enterprise, flexible work systems, and promotion of economic policies which also gave importance to the environment.

Despite the criticism being made by some quarters, Malta was also doing its part and significant progress had been made over the past few years. One could see, for example, the number of projects emerging from the Kordin Incubation Centre, the work of the Innovation Relay Centre and the ongoing revision of the Business Promotion Act. Efforts were being made for a stronger emphasis on research and innovation. Indeed, a point made in the score chart report but which was never mentioned by the opposition, was how Malta and Estonia had done better in innovation than many EU countries.

One of the targets set by Malta towards which strong progress was being made, was to have 75 per cent of households having a computer and internet access.

Malta clearly needed a stronger culture of entrepreneurship. He would like to see MIC, and eventually the Forum for Europe to be more closely involved in the activities of Small and Medium Enterprises, helping them to identify and seek EU funds. There needed to be less bureaucracy in the way of business start-ups and the banks needed to be more involved in risk financing as a means to encourage entrepreneurship and innovation.

Dr de Marco observed that some countries, particularly in Eastern Europe, had introduced a flat rate of tax, at 20 per cent, for individuals and companies. Perhaps this was not the best system for Malta, but there was need for debate on this subject.

Social inclusion was also very important. Much was said about Malta having a low employment rate. Yet the male employment rate was actually higher here than the EU average. Malta's figures only dropped sharply because far fewer women worked. That was the result of local culture, with many women focusing on bringing up their children, which was not a bad thing. Nonetheless, there was need for more women in gainful employment and the government had launched several measures to bring this about.

Worker training was another important challenge. Here again progress was evident, with sharp increases over the past three years in the number of young people going to the university or following vocational courses.

Malta, clearly, was moving forward. One had to remember where it left from. He felt the government should draw up an action plan for the implementation of the Lisbon agenda targets, and appoint a national coordinator to oversee it.

The government and all sectors of society needed to work for the success of the agenda because failure would mean problems in other areas, not least the social programmes.

Earlier in the debate, Nationalist MP Michael Asciak said it was worrying that according to a report in The Times, quoting EU figures, Malta had the least educated workforce in the EU. Although the number of post secondary students was rising, only some seven per cent of university students were in science-related courses, showing how far Malta still was from having the number of graduates it required. Dr Asciak insisted that students should be given the right guidance as to their choice of subjects but they should be allowed to make the final choice.

Nonetheless, it was very clear that the chances for educated students to find a job were by far greater than those of an uneducated person.

Parliamentary Secretary Tonio Fenech observed that the EU was trying to make its economy the most competitive in the world at a time when the economies of China and India were making great strides forward, hindering growth elsewhere.

Europe's challenge was not just economic growth, but maintaining its social system as its population grew older.

Referring to opposition remarks, Mr Fenech said one had to admit that the uncertainty before Malta joined the EU had not been conducive to growth.

The Opposition said it was willing to do its part only if the government admitted its mistakes of the past. It was as if the government had not done anything, and the Labour Party, in government and in Opposition made no mistakes.

Among the significant actions taken by the present government was the setting up of Mcast, which had given new impetus to vocational education.

In comparing economic growth with other countries, one should acknowledge that Malta's average GDP, together with that of Cyprus, was the highest among the new EU member and it was therefore harder for them to improve it than the other accession states. Malta also had structural problems which other countries did not have, and it therefore had to set its own priorities. The country had to see at which markets it had to address its effort to be able to compete. The biggest challenges ahead were to achieve a high return from government spending, the attraction of foreign direct investment and job creation.

The economy had to be stable, sustainable and one which promoted efficiency in the allocation of resources.

An important element for economic stability was deficit reduction. This was a challenge which had to be addressed so that when there were hard times, the government would be able to inject more funds in the economy.

Mr Fenech said everyone wanted Malta to have a health sector which was sustainable, by raising efficiency, not taxes. Structural reforms were needed in several sectors to make them competitive and to reduce burdens on taxpayers.

Family Minister Dolores Cristina observed that the European Commission's revision of the Lisbon agenda earlier this year aimed at modernising the European social model. The revisited agenda had two priorities - job creation and equal opportunities across the EU aimed at eradicating poverty.

In terms of EU statistics, nine per cent of EU citizens were in a constant risk of poverty. Poverty was inherited down generations and there was a need for a more aggressive fight against social exclusion. The EU was saying that its legislation should include a social impact assessment.

The objectives which had been set out were backed by funding from various sources such as the structural funds, the social fund, the progress programme for job creation and the social protection programmes. The EU was effectively creating a safety net for the vulnerable sectors of society while helping everyone to move forward.

Malta too had set its own targets. The National Plan on Social Exclusion had 12 priorities. Although the plan had been described by some as a wish list, the projects which had been identified had been planned and were gradually being implemented. If anything, this national plan gave a clear picture of the country's needs. The government never denied that there were some people at risk of poverty or who were vulnerable. This was a situation found everywhere.

The percentage of people at risk of poverty in Malta was about the same as the EU average. While no country could eliminate poverty, her hope was for this figure to be reduced. Indeed, in the social inclusion list, Malta had placed 10th out of 29, ahead of countries such as France, Belgium and Spain. Particular efforts were being made by the Maltese government to raise the participation rate of women in the labour force. The current rate was 33 per cent, compared to the EU average of 55 per cent and the Lisbon agenda target of 60 per cent by 2010. Malta's targets were not so high, but clearly more women needed to be encouraged to take up gainful employment.

In this context the government was encouraging the setting up of child care centres, and regulations were expected to be presented to Parliament shortly. The European Social Fund was providing €1 million for the setting up of child care centres at places of work. The government had also introduced tax exemptions for women who returned to gainful employment and various schemes were being held by government agencies, such as training programmes by the ETC. Among them were programmes addressed at single mothers and young people who were leaving institutions and needed job training and accommodation.

Clearly, the plan against social exclusion was far from being just a wish list.

Rural Affairs Minister George Pullicino said economic reality was constantly changing and the EU had to make itself more competitive in order to be able to generate the same number of jobs as in the past.

The EU was competing with regions which did not have the living standards, the social systems, or, indeed, the environmental standards, which the Europeans enjoyed.

The European Commission had admitted that not enough progress had been made towards the attainment of the Lisbon targets. The targets were revisited late last year but the aim remained to raise productivity, job creation and ultimately, economic growth.

MPs who had opted to be partisan should have kept in mind that it had been a Labour government which closed down the original Mcast and it was the present one which set up a new one. The vacuum in between, however, meant that many workers lacked skills. It was also under a Labour government that BSc courses were not offered at the university. It was only now that the country was focusing on research.

Malta had never had so much investment in worker training, notably through the ETC.

It was significant that the number of students studying agriculture in Mcast had doubled, reflecting confidence by young people in this sector. For, clearly, economic growth should not be in conflict with the environment.

When environmental standards were followed, companies raised their competitiveness. Environmental systems and standards generated new economic opportunities. Even China was now realising that its fast growth should not be at the expense of the environment.

Mr Pullicino noted that the EU as part of its environment technology plan was using market-based measures to help the environment, such as eco-contributions. Such measures were used to encourage to opt for products and services which did not harm the environment.

Other speakers will be reported tomorrow. In his concluding remarks, Competitivess Minister Censu Galea criticised Labour MEPs for having voted against the opt out clause in the European Parliament debate on the Working Time Directive. He said the government had always been consistent on this issue and Malta would continue this battle in the interests of the economy and so that the workers would continue to have the right to decide how much overtime to do.