Basis for pact 'already there'

Most social partners agree to another attempt at hammering out a social pact, with many saying that a document compiled at the level of the Malta Council for Economic and Social Development already formed the basis for such an accord.

Social partners contacted yesterday said the term social pact as it was being used needed to be better defined. They said a common position paper compiled by economist Gordon Cordina after a series of individual meetings with the social partners could be used as a model for a pact.

The social partners' reaction was sought after Prime Minister Lawrence Gonzi made an appeal on Wednesday for a fresh attempt at reaching an agreement on a social pact.

The call was made nearly five years to the day when unions, employers and the government were close to reaching an agreement on a social pact in November 2004. However, it had fallen through in the face of objections, particularly from the General Workers' Union, to some of the key points of the 22-measure economic plan proposed by Victor Scicluna, then MCESD chairman.

Over the past few months, the social partners have sat down together and, with the guidance of Dr Cordina, compiled a position paper ahead of the forthcoming budget.

It set out the social partners' opinions on the current state of the economy and the strategic direction which had to be taken to ensure socio-economic development.

It is based on a number of fundamental principles: control of inflation; the cost-of-living allowance (COLA) for this year; investment in human capital; the sustainability of fiscal initiatives and the social welfare programmes; improved regulation and governance; and the achievement of competitiveness objectives.

The workers' representatives on the MCESD agreed to use the document as a basis for these talks.

William Portelli, Confederation of Malta Trade Unions president, said: "We are always willing to discuss.

"The social pact means agreeing on a framework which we think is already there, in the form of a common position paper compiled by Gordon Cordina. This could serve as a template for discussions on a social and economic pact in the context of sustainability."

Similarly, the general secretaries of the two main unions - the Union Ħaddiema Magħqudin and the General Workers' Union - said such an agreement was "in the national interest".

UĦM's Gejtu Vella said it would be beneficial to the country, while GWU's Tony Zarb said a lot of work had already gone into formulating the position paper.

"I hope a call for fresh talks on a social pact is not some manoeuvre to kill what we have achieved so far," Mr Zarb added.

Although they did not disagree with the idea, the employers said there already was a social pact at MCESD level.

Vince Farrugia from the Chamber for Small and Medium Enterprise, GRTU, said: "Technically, discussions are ongoing on economic and social guidelines. Whether you call this a social pact or not is another question."

Mr Farrugia, however, could not forget the experience of marathon meetings which had led to no agreement.

"Given the experience of the last time we tried, social partners are reluctant to start such a laborious exercise from scratch.

This is why I think we should build on what we have so far."

Joe Farrugia, Malta Employers' Association director general, believes a social pact is the by-product of social dialogue which he said was already strong at MCESD level.

"Dr Cordina's document is a form of a social pact. Yes, it's true, it's bi-partite because the government was not included, but it can still be considered to be a social pact.

"There are countries which have bi-partite social pacts. We will not shoot down the Prime Minister's proposal but there is a lot of common ground already," he said.

Mr Farrugia said there were certain social partners who were resisting the social pact idea, "probably because of the bad experience of five years ago".

He added that political parties should put their heads together and come up with common national policies on certain issues such as competiveness and productivity.

Even Kevin Decesare, Malta Hotels and Restaurants Association president, believed there already was a social pact in place.

He said his interpretation of what Dr Gonzi said was to refine the present mechanism.