Going back to fundamental values

The international fin-ancial and economic crisis has generated many questions: ab-out market functioning, about the role of the state and governments in the economy. Not least, about the contribution of business to society. Although this debate is legitimate and necessary, it is important to recognise that the free market economy has brought tremendous growth and welfare to Europe's citizens.

BusinessEurope, a pan-European organisation to which the Malta Chamber of Commerce, Enterprise and Industry is affiliated, has recently compiled a document on this issue together with recommendations for a stronger European economy.

Entitled Go For Growth, the document states that, in order to strengthen the economy, we should go back to the fundamental values of the market economy. These include: rewarding work and productive investments; encouraging reasonable risk-taking; ensuring transparency on market value; protecting and developing intellectual property rights; identifying and providing sanctions for fraud; banning distortions of competition and fight protectionism; and, finally, financing affordable public services and social security.

Implementing these principles is essential for the prosperity of European citizens.

The development of companies is central to that prosperity. Growth and employment will be achieved if EU decision-makers put the development of companies at the centre of their policies, if the Single Market is revitalised and if Europe's position in the world is strengthened. When they can operate in a business-friendly environment, companies are successful in producing first-class goods and services, in generating jobs, in developing new technologies. When companies are successful, they create the wealth that is needed to finance public services and social security.

Growth in the EU is now forecast to reach one per cent this year. This is an improvement but it is not sufficient to restore job creation and stabilise public debt. The European Union must aim at doubling its growth potential to an average of two per cent a year over the period 2010-2014 as suggested by EU President Herman Van Rompuy. BusinessEurope estimates that this could generate more than 6.5 million new jobs in the EU by 2014 and save over €450 billion in public debt levels.

One thing is certain: There will be no business as usual in 2010-2014. The post-crisis world will be very different. Global economic growth will no longer be mainly driven by developed countries. Emerging economies will play an increasingly important role. They will be our partners but also strong competitors, even in high value-added products.

Maltese and European companies have a lot to offer! But much more could be done with appropriate policies to address obstacles to innovation, skills shortages, lack of venture capital and under-development of entrepreneurship. Supporting innovation is absolutely essential because it is the key to economic recovery, the motor to revive the Single Market and the best way to generate new jobs.

Fighting climate change will remain at the highest level of priorities. European business has made great efforts to reduce CO2 emissions under the Kyoto protocol rules. We are committed to continue doing so even in Malta. But climate change will not be solved by unilateral EU actions and cannot be driven only by rules. If the EU wants to lead in the fight against climate change, it must put a much greater emphasis on technology.

It is indispensable to secure access to energy through the diversification of energy sources and consumption efficiency. Nuclear power, renewable energies, carbon capture and storage and other innovative technologies are essential to meet this challenge.

Business in Europe expects from EU institutions to implement an agenda for sustainable growth. It must develop a truly integrated industrial policy. Companies, for their part, are ready and willing to bring their contribution to achieve a dynamic and innovative resource-efficient economy.

Go for growth is more than just a slogan. Go for growth must become the motto for all EU policy actions.

The author is president of the Malta Chamber of Commerce, Enterprise and Industry and member of Business Europe's Council of Presidents