A taste of EU debates

In the last two weeks we had a really good taste of what EU debates on issues that are important for Malta could be like. At times one wonders whether one has really grasped the situation because positions taken by different member states or members of the European Parliament (who do not represent a country but rather form part of a political grouping) may seem to be illogical to us.

We may wish to take the attitude that, after all, these are issues that do not concern us or, even if they do, we can do little to influence them. This is in fact the attitude taken probably by the majority of citizens of the European Union. This would be a grave mistake.

One of the issues was the EU budget. Last week the ministers of finance of the member states of the European Union met in Luxembourg to discuss the EU budget for the period starting 2007. There is still an element of strong disagreement among the member states with those countries that are net contributors to the EU budget wanting to hold back on expenditure, while those countries that are net beneficiaries from the EU budget wanting to have a larger budget.

It is probably nothing new for those who are seasoned in such EU debates and they see this simply as a ritual that is gone through every time the EU budget is discussed.

This discussion has nothing to do with Malta's status in the European Union as an Objective One country, and therefore enabling it to qualify for the maximum amount of funds possible. As such, I strongly believe that for our economy, at present retaining Objective One status is better than an additional Lm5 to Lm10 million from the EU, because it enables us to continue providing the type of investment incentives contemplated by the Business Promotion Act. For companies that are benefiting from these incentives (and in this case we are talking of a very significant chunk of the manufacturing sector), retaining Objective One status represents the type of certainty they like to operate in.

Even so, the size of the budget would determine the amount in absolute terms that Malta would get in EU funds. The divergence that exists between the member states, as reported in the media, is of about 10 per cent. In other words should the EU have a budget of one per cent of the total gross domestic product of the member states or should it be 1.1 per cent?

All things being equal, this could represent an additional 10 per cent for Malta, therefore a sizeable inflow of funds. Any additional funds are welcome for our economy but we need to appreciate that these are short-term in nature. As our economy grows and we lose our Objective One status, this flow of funds would decrease.

Thus, although we need to lobby for additional funds, especially if they are to be used in infrastructure projects, environmental projects and educational projects, we need to make sure that the increase in the EU budget is not just a ploy to increase the cost of the EU bureaucracy.

This is the claim of those countries that are net contributors to the EU budget. It is in Malta's interest that there are as much funds as possible for those countries whose gross domestic product per capita is still well below the EU average. This means not only a bigger budget but also that the budget is spent wisely.

We are probably the only member state that can understand this situation, as most other net beneficiaries are accustomed to expensive, inefficient state bureaucracies. We understand the need for efficiency as well as the need for solidarity. The other member states may only be viewing things from just one perspective and we may strive to achieve a reconciling of these two divergent views.

The second issue is about the working time directive. As things stand today, the individual employee has the right to choose whether to work a maximum of 48 hours a week or not. He cannot be forced to work more than that but he can opt to work more.

This goes to the very heart of the European Union in that it allows for full individual freedom. However, the employee has the protection of the law against exploitation if he needs it.

One cannot understand the position that has been taken by the members of the European Parliament, who voted for the removal of the option enjoyed by the employee. Removing such an option reduces individual freedom but also kills jobs. It leads to a loss of competitiveness.

This measure may be liked by some zealous trade unionist but is likely to be unpopular with employers and employees. At a time when the European Union seeks to spend more effort and money in improving the competitiveness of firms operating within the EU itself, initiatives are being taken that would not be conducive to the creation of jobs.

We are now an integral part of this European scenario and we can influence it. I have always believed that EU membership has more advantages than disadvantages for our economy. The way we influence the European scenario is critical, such that the advantages of EU membership do not remain on paper but become something concrete.

This taste of EU debates is an indication of some of the joys still to come. We cannot ignore them or be complacent about them or just seek to cope with them; we need to take a proactive role as is already being done.