Instead of gabbing on about Arriva, the cost of living, union strikes, divorce, same sex marriages, votes of confidence and the like, shouldn’t we, as a country, start focusing our creative energy on identifying what kind of a Europe best suits our national interest? I don’t like what I see happening in Europe, especially with the euro debt crisis worsening by the minute, and the countries that matter (mainly Germany, UK and France) are already positioning themselves on the subject and trying to answer this question themselves.

The local business community needs to urgently decide what type of Europe best suits us- Kevin-James Fenech

In his speech to the Lord Major’s Banquet last month British Prime Minister David Cameron answered the question “What type of Europe?” as follows: “One that is outward-looking – with its eyes to the world not gazing inwards. One with the flexibility of a network, not the rigidity of a bloc – whose institutions help by connecting and strengthening its members to thrive in a vibrant world rather than holding them back. One that understands and values national identity and sees the diversity of Europe’s nations as source of strength.”

The European Union project is arguably at a precarious crossroads and Malta needs to understand which type of Europe suits it best. I make this suggestion within the context of the Cameron-Merkel meeting in Berlin a few weeks ago, out of which seemed to emerge two diametrically opposed visions for Europe: Merkel’s determination “to complete economic and monetary union” by having more Europe rather than less of it versus Cameron’s belief that now is the opportune time “for [EU] powers to ebb back [to national governments]…and for the European Union to focus on what really matters [the strengthening of the single market]”.

With this backdrop, I believe that the local business community needs to urgently decide what type of Europe best suits us: a federalist Europe (a United States of Europe) or an inter-governmental Europe where the emphasis is on the strengthening of the single market without the further dilution of national sovereignty. True the local political parties all claim to be ‘European’ or more European than each other but it is by no means clear what their vision is post-euro debt crisis; which could arguably see the breaking-up of the eurozone as we know it (not as unlikely as we’d perhaps like to think).

The business community, therefore, needs to lead the way since politicians (with all due respect) will only politicise the issue. The business community needs to investigate, discuss and decide what is in our best interests and then lobby the government. What will contribute to businesses’ future growth and sustainability?

Is it a multi-speed Europe where the ‘most European’ go down the road of further and deeper political integration leaving the rest in a looser EU arrangement, whatever that might be (and where would Malta stand in such a scenario) or a Europe primarily focused on making the single market – the EEA – work better, meaning the free movement of capital, labour, goods and services between the member states without any hindrance whatsoever (something that still has not been achieved completely).

In a sense, the EU project today, with all of the political and economic integration of the last 20 years as well as the increase in membership, is perhaps similar to a corporate company that has merged and acquired too many businesses with the typical consequence of losing strategic focus, suffering from diseconomies of scale and having to contend with ‘internal’ competing interests. In business, such a situation would require a demerging process to take place so that the business can re-focus on what really matters and sell-off non-core activities. Maybe, just maybe, the EU is about to go through a similar political and economic ‘de-merging’?

Let me not mince my words: Malta should today be in the EU and the eurozone but it makes a massive difference what type of Europe emerges out of the euro debt crisis which let’s be frank threatens to alter the very foundations of the EU project.

I think Malta’s future rests on it being attractive to international business and foreign direct investment (FDI) which in turn means Malta having a stable, low tax (on-shore) tax model and a pro-business (minimum red tape) free-market environment. A few people raised an eyebrow, for example, when EU leaders were (and still are) considering a European financial transaction tax or a single European fiscal policy (one Europe, one federal tax). Some are even talking about giving the European Central Bank even more powers in order to respond to the debt crisis with all the financial implications that that brings with it.

I do not seek to influence the reader one way or the other, since even I am not completely clear, at this early stage, on what should be our ideal position. The topic is immensely complicated; each sub-argument of the Merkel versus Cameron debate posing multiple and uncertain consequences. But I do think that this is something that the local business community should seriously consider with the utmost urgency and take the lead. Since the type of Europe we could end up with might not suit our best interests and we (the Maltese) need to start thinking about this matter now before it is too late.

What kind of Europe? One could argue perhaps: A Europe that puts business, commerce and trade first and above, if need be, further political integration.

www.fenci.eu

Mr Fenech is managing director of Fenci Consulting.

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