In examining the 2020 or 2015 vision for Malta we must be realistic and project ambitious, but doable targets. As Maltese we are lucky to live in a country endowed with high quality workers and entrepreneurs. The resilience of the economy is owed to them. Another factor is the economy's built-in economic stabilisers which have cushioned the economy from the worst ravages of the recession. It is for this reason that while governments get worried that the tax take is falling in a recession, the econo-mist is unperturbed because economics at its most basic, teaches us that we should spend more and tax less in bad times and do the opposite in good times.

Politicians in government are often heard telling us the opposite; that we cannot afford to cut taxes during the recession and we must wait for good times in order to deliver a tax cut.

This is referred to as pro-cyclicality, which is considered as the major cause of exacerbating the economic crises globally. In fact, both in the area of the reform of the Stability and Growth Pact and in the sphere of financial regulations we are putting in place a series of carrots and sticks to avoid such pro-cyclicality for the future.

I believe the government, with the recent needless price shocks it gave to the economy, has left the country with little or no appetite for economic change. Instead, we cling to a long-held war-time mentality of waiting for the next "convoy": the Hilton project, then the Cottonera Waterfront, now Smart City, the Valletta project, White Rocks and so on.

This is not to criticise any of these projects, but we cannot rely on them as our only economic life-vests. We need a different approach and a different frame of mind. Instead, our focus should be on reaching and exceeding export targets, or a tourism target, or an employment figure, say by 2015 or 2020. These should be our real targets; our real life-saving convoys.

Because we have a history of being on the side of the victors in past wars we also fed a feeling of invincibility - which make us naturally cling to a number of myths.

Myth no. 1 is that Malta was one of the countries least hit by the international recession and has come out unscathed. Yet, you look at the Eurostat data and find that Maltese manufacturing exports fell by 25 per cent in 2009; that tourist bed nights fell by 14 per cent; that construction fell by 2.5 per cent, figures which are much worse than the EU average.

Myth no. 2 is that the perceived good performance was due to the government's fiscal stimulus package. However, we are all aware that a real fiscal stimulus comes from an expansionary budget (that is, an increase in public spending and/or the fiscal deficit). According to Eurostat, Malta was unique in that, with only one other country in the whole European Union, it managed to reduce the deficit in 2009 smack in the middle of a recession.

The third myth is that we are out of the recession. As a small open economy we can only say that when Europe as a whole can declare that too with conviction.

These three myths are related and are quite defendable given that Malta's GDP negative growth and its increase in unemployment was lower than the EU average.

This leaves the question of where and how the economy took the brunt of the recession. One would like to take ST and the gambling industry from the equation and evaluate all the other sectors.

On employment, how can we be content with a one percentage improvement over the EU average when our Maltese labour force is the lowest in the EU and 18 percentage points short of the Lisbon Agenda target of 70 per cent?

So what is our future path? Is our 2020 agenda of any use? Definitely, but unless we obtain an annual economic growth rate exceeding four per cent there is no chance of converging with the EU standard of living.

The biggest millstone around the economy's neck is not the pensions or even social services, as some might want to think, but the unacceptably low employment base.

Regarding the financial services industry, my view is that while the new EU legislation will change the culture and mentality of financial services, Malta's size is such that we can find a niche in which to generate wealth.

The outlook overall is generally positive. We have the resources and structures to succeed if we want to.

So we must raise our sights high for 2015 and 2020. We must examine what damage the recession has left, lick our wounds and move on. But we cannot live in a fool's paradise.

We are 70,000 jobs short. This is our Mount Everest. A group of young energetic and courageous Maltese have conquered it. The country needs to do the same.

Prof. Scicluna is a Labour member of the European Parliament.