The Malta Chamber constantly seeks to place the country’s competitiveness at the top of the national agenda because it believes it is the central theme to develop our long-term economic future.

It has often sought to sensitise the local authorities on internally-generated issues, which lead to loss of competitiveness. The solution lies within the country’s own competence.

There are other issues, however, where the solutions lie beyond our control and, even there, the Malta Chamber makes serious attempts to intervene with the European Authorities in support of Malta’s cause.

Remoteness and insularity is a case in point. Malta’s geographical characteristics have a direct bearing on the operating cost base of local businesses. Recently, the Chamber has taken this matter to Brussels and, during the third European Parliament of Enterprises held last October, we explained how, at a regional level, energy prices for industry, for instance, assume crucial importance because they often average close to double the EU average tariff.

It is hoped the EU finally allows countries to address their insularity and permanent handicaps with compensatory measures that are equally permanent in nature

The reason behind this is quite simple. Countries on the periphery of the continent have inherent limitations such as external dependencies and remote insularity which preclude them from achieving competitive electricity rates since they are unable to benefit from economies of scale in the generation and distribution of electricity.

With the competitiveness of the private sector in mind, we are concerned that energy in small, resource-constrained countries is fast becoming a limiting barrier for economic growth. In our case, the effects of energy rates on cost-competitiveness is a matter which cuts across all economic sectors more so in the manufacturing and tourism sectors where margins are very tight.

With a population of less than half a million, Malta cannot produce and sell energy at the same levels of efficiency as larger economies.

This is purely because any given power-generating plant will operate with less efficiency than mainland Europe. Economies of scale dictate that a smaller number of consumers results in lower returns on the investment made on power plants and other related infrastructure.

The Malta Chamber was clear in its claim that the EU must iron out certain existing legal and regulatory inconsistencies which prevent it from neutralising the permanent disadvantages faced by ‘single island regions’, which in turn result in uncompetitive and unsustainable conditions for operators.

We are aware of special legislation and support the EU makes available to disadvantaged regions, much larger than Malta, which are remote and marginalised.

Being a state, Malta does not qualify for such support within the regional aid framework. We believe this creates a further handicap to Malta’s competitiveness and must be addressed.

This point was also made during a meeting the Malta Chamber had with Jacek Krawczyk, the president of the Employers Group of the European Economic and Social Committee who agreed this was a sensitive matter and that a specially dedicated session would be held at the EESC on the subject, with all stakeholders and regions involved.

It is therefore encouraging to note that, in the conclusions of the recent EU Energy Summit, European leaders stated that “special attention will be paid to the more remote and/or less well connected parts of the single market such as Malta”.

It is encouraging because the summit conclusions are recognising the remoteness and insularity of Malta as a significant feature of its geophysical position in Europe’s periphery.

This fact is also recognised in the General Block Exemption Regulations published on June 17, which defines Malta as a “remote region” together with Cyprus, Ceuta and Melilla and all regions already falling under the “outermost” definition.

Besides, the EU’s recent statement suggests it is finally recognising the challenges posed by permanent geographical disadvantages faced by countries such as ours.

It is hoped the EU finally allows countries to address their insularity and permanent handicaps with compensatory measures that are equally permanent in nature.

The union already acknowledges that production in Europe increasingly involves value chains stretching across countries with each country specialising in one or several stages.

It must now recognise that only by ensuring fair and just cost-structures between mainland and insular territories can it ensure that business in Europe is truly complementary and in a position to innovate and compete together in the face of global competition.

David Curmi is President of the Malta Chamber.