Budding businesses will be receiving support in their efforts to secure essential loans from banks in the form of government guarantees amounting to €15 million.

The first-loss portfolio guarantee essentially means that the government will cover any losses incurred by banks when dealing with small businesses.

The announcement was made by Deputy Prime Minister Louis Grech yesterday at a conference of the Malta Council for Economic and Social Development.

He said the loan guarantee scheme follows an EU initiative that Malta and Spain have been the first to implement, and more details would be announced soon.

The €15 million would be over and above the €95 million committed to supporting small businesses through incubation centres, financial incentives and other schemes.

The €15m in guarantees will be over and above the €95m committed to supporting small businesses through various schemes

The conference, held at the Dolmen Hotel in Qawra, dealt with the subject of competitiveness and social inclusion. In his closing remarks, Mr Grech spoke of the need to continue to fight bureaucracy, which negatively impacts competitiveness.

He also spoke of the suffering caused around the world due to the economic situation and added that perhaps it was time to review certain state aid rules.

Mr Grech said he believes in an inextricable link between competitiveness and social inclusion. Opposition leader Simon Busuttil also made this point, saying a thriving economy should be there for the people.

“The vision of the Opposition is to work together to see what type of economy is needed in the next 10 to 20 years and to ensure that this economy is a tree everyone can eat from,” he said. He spoke about the importance of addressing cash flow problems in order to encourage investment. An exercise conducted by the Central Bank of Malta had revealed that the median interest rate charged for credit in Malta was almost six per cent in 2014, which was among the highest in the eurozone, he noted.

The corresponding rate in Luxembourg was two per cent. Speaking about the Employment and Training Corporation, he said it had many good schemes and was doing a good job. However, more needed to be done to identify the people who were being excluded and draw up a tailor made programme for them.

Efforts were also needed to encourage people who reached retirement age to continue working and to address the issue of low pensions.