Editorial

For some time now the government has been accused by some quarters that, contrary to the approach taken by other governments in the face of the recession, it is living in a state of denial. The government insists the economy is still showing signs of growth but others are not so convinced. The riddle over this will be solved when the next set of economic indicators is issued, unless, that is, the Labour Party stirs a controversy over the reliability of statistics!

The private sector, aware of the difficulties a string of firms are already facing following a drop in orders, has been prodding the government to take immediate action. A sense of impatience appears to be creeping in as more bad economic and industrial news flows in from leading industrial countries.

The government first reacted by incorporating a stimulus package in the budget for this year, believing that this will go a long way towards easing the problem. Faced with the problems some firms are meeting, and with the calls being made by private industry for speedier action, a task force has now been set up specifically to look into the problems of manufacturing industry. By all accounts, it is a good move and, if the task is taken up with the eagerness and urgency required, it should be of great help.

According to the Finance Minister, Tonio Fenech, who is chairing the task force, they will be adopting a micro approach. In other words, they will be considering tailor-made solutions for individual companies requiring help in order to keep going.

This is all very well but, concurrently with such an approach, measures would also need to be taken to relieve some of the pressures that both industry as a whole and tourism are facing today. The Chamber of Commerce, Enterprise and Industry is suggesting, for instance, that the government ought to reduce costs in the short and medium term. This is not the first time such a call has been made but in times like the present it assumes greater urgency.

Most of the national discussion has so far centred on the impact that the planned discharges from STMicroelectronics is expected to have on the economy but, besides this, there are up to nine firms employing 1,200 staff that are working on a four-day week. This means reduced income to the individuals and, eventually, less tax to the government.

In the case of exporters, the government can hardly do anything to reverse any possible drop in orders brought about by the recession but the task force can perhaps work out, as suggested, tailor-made assistance to the firms affected so that they can ride the storm and be in a better position to go back to normal operations the moment the situation improves.

Taking a holistic consideration of the situation, the €20 million allocated for specific schemes for industry, though welcome, may appear to be somewhat low, though the government may well argue that, in addition, it has also allocated €30 million for initiatives relating to renewable energy.

What is important is for the members of the task force to put their heads together now and see how firms in difficulty can be helped before the situation gets tougher.

As it has already been remarked, the idea for the setting up of the task force is good but it would need to start its work without any loss of time.