The recent spell of data published by the National Statistics Office continues to reflect the pressures that our economy is having to sustain as a result of the international economic situation. It also indicates that our economy has been capable to withstand these pressures and that any pick-up in demand would eventually reflect positively on our exporting sector. The data refers to the labour market, international trade and investment and shows that we are still in a transitory position. However, the economic barometer would seem to show variable with a tendency towards good weather.

One can therefore understand that there may exist an element of uncertainty. Using again the weather analogy, it is as if one does not know whether it is spring or summer, and one is therefore undecided about what to wear.

We must also admit that some of the uncertainty is caused by ourselves, as a credit rating agency recently pointed out. This agency did state in no uncertain terms that membership of the European Union is really no longer an option for Malta but a clear necessity. It is true that membership puts on us certain obligations but it also brings its own benefits.

On the other hand, these obligations will still be there even if we stay out of the EU, because of multilateral trade agreements - mainly those of the World Trade Organisation - that do not just involve Malta and some other state or economic bloc but the whole world. We may scream till we go blue in the face that we decide on our own destiny, but we know that is simply not true. Malta is part of the world economy and as such must play the game according to the rules of the world economy. Moreover, thinking that a partnership style agreement with the EU would allow us to do what we want is being downright simplistic. The EU will do all it can to protect the interests of its enlarged membership.

All this implies that the quicker we resolve the EU issue in favour of membership, the better it would be for us. This would remove the only significant internal issue that seems to be hampering our economic performance.

I state 'the only significant internal issue' because the restructuring of our economy with the removal of protective barriers and state subsidies to unproductive and unprofitable enterprises, the dismantling of monopolies in both the private sector and the public sector that lead to unreasonable costs and inefficiencies, and the sustainability of the public sector deficit, are reforms that must be undertaken to maintain the external competitiveness of firms operating in Malta.

On this there seems to be agreement, and therefore there is no uncertainty, and, as such, the argument is not whether these reforms are required, but whether the pace of the reforms is fast enough or too fast. Membership of the EU would tend to speed up these reforms and even this would present an element of certainty because one knows that there would be no more dilly-dallying. So far, the uncertainty on the EU membership issue has made such dilly-dallying appear justified.

Thus, resolving the EU membership issue would leave us to concentrate on the external issues that, given the openness of our economy, are very significant. This means, in concrete terms, positioning ourselves to exploit fully the opportunities that the international situation presents and taking the necessary steps to stand up to the threats that emerge from time to time.

One living example of how we have managed to exploit the international situation is the development of the Malta Freeport. Up to a few years ago, there were still people who doubted the economic gain this enterprise has brought to the Maltese economy.

Trying to downplay the impact of the international economy, and the uncertainty that today surrounds it, on our economic performance, would be very stupid indeed. This uncertainty is probably best indicated by the difficulty the major countries are having in forecasting their own economic growth and the need they are facing to revise them. We can do very little to manage this uncertainty, but we can take steps to make the best of what we have to overcome it. The decision taken by practically all major manufacturing firms in this country to expand the operations of their local plant is a way of making the best of what we have.

This brings us back to the economic data recently published by the National Statistics Office. Investment in the manufacturing sector in the quarter April-June of this year increased, albeit slightly, when compared to the same quarter last year, thus reversing a trend that had been evident for a number of months.

Another interesting development was the increase in exports in the month of July of this year by just over 20 per cent, when compared to July 2001, while the imports of industrial goods (what effectively represents the raw material for industry) increased just over 15 per cent.

Uncertainty does not go away by pushing it under the carpet or by imagining it is not there, even though there is the possibility of it feeding upon itself. In certain respects the economic facts do not just justify certain negative perceptions in the business sector, probably implying certain unrealistic expectations.

I believe we have managed the uncertainty created by the international situation rather well in this country, each contributing their own little bit. For this reason, the EU issue needs to be resolved within a realistic time frame after the conclusion of negotiations, to allow us to get back to the core issue of generating economic wealth.