STATEMENT BY MR RICHARD CACHIA CARUANA, CHAIRMAN, CORE NEGOTIATING GROUP, AT THE NINTH MEETING OF THE ACCESSION CONFERENCE HELD IN BRUSSELS, 28 NOVEMBER 2001

Since our last meeting in October the Commission has published its annual reports on the state of the accession negotiations. There is much in these reports which is encouraging to the candidate countries in general and to Malta in particular.

It is clear that the accession process remains well on course to meet the objective established in Gothenburg, for the first set of new members to take their place within the Union in time to participate in the next elections to the European Parliament in June 2004. Over the past year the road map established at Nice has given the process the expected impetus making it possible for all those involved to be confident that the negotiations will be completed during the course of 2002.

The Commission's reports confirm the guiding principles of the accession negotiations and in particular the principles of objective differentiation and of catch-up. We also welcome the confidence expressed by the Commission that accession negotiations "can be concluded independently of decisions for financing the EU after 2006".

The reports, once again, confirm Malta's readiness for EU membership, underlining the fact that we fully meet the political and economic criteria. They also indicate that Malta's legislative and administrative capacity is well on its way to meeting the full requirements of EU membership. The steady progress we are achieving in the negotiations is in itself a further confirmation of this evaluation.

These developments renew our determination and commitment to complete the last, and most complex phase, of our negotiations over the next few months. Today we are agreeing to provisionally close the nineteenth chapter. We look forward to this time next year when we expect all the necessary conditions to be in place for Malta to be among the first set of candidates who will be forming part of the next enlargement of the Union.

It is of great satisfaction to us that we can agree today on the provisional closure of chapter 13, dealing with social policy and employment. The closure of this chapter is the culmination of months of intensive talks between our officials and those of the Commission. It is also the fruit of and a tribute to the extensive process of consultation among the social partners in Malta. I emphasize this point because our country has deliberately attached a great deal of importance to social dialogue throughout the accession process in general and in the negotiations on social policy in particular.

In this chapter, Malta made four requests concerning the organisation of working time, noise at work, temporary or mobile construction sites and the use of work equipment.

First of all, I would like to assure the Conference that Malta fully subscribes to the European Union’s acquis in this field, in particular the aspects that relate to health and safety at the work place. Our requests stem from a genuine need for a period of adaptation, which takes into consideration the restructuring process and the challenges that characterise our labour market and industrial base.

Over the last few months, important legislation has been adopted and structures set up which enable Malta’s labour market to respond to the demands of economic development. I would like to highlight in particular the setting up of the Occupational Health and Safety Authority which is responsible for the implementation of the health and safety acquis.

I would also like to mention the changes that have taken place within the Malta Council for Economic Development, the forum in which consultation between social partners concerning major national policy issues takes place. This Council has now been given a legal framework and has, significantly, been redesignated as the Malta Council for Economic and Social Development to reflect the wider role that the representatives of civil society and the social partners will henceforth be called upon to fulfil.

During the recent visit to Malta by Commissioner Anna Diamantopoulou, Malta and the European Commission signed a Joint Assessment of Employment Policy. This exercise will assist Malta in the further development of its employment system so as to better meet the challenges of the fast evolving international economic situation. Furthermore, progress has been made with a view of setting up the necessary structures to administer the support that Malta will be receiving from the European Social Fund after accession.

In the coming weeks, Malta will continue to adopt further crucial legislation in the social field. The Gender Equality Act will be adopted during the first quarter of 2002 and will supplement the measures that Malta has already taken in this area. Malta is committed, through government policy and legislative measures, to the pursuit of equality of treatment between men and women, a principle that is already enshrined in our Constitution.

Moreover, in the next few days, the Ministry for Social Policy will be publishing a White Paper outlining the changes that will be made to Malta’s labour laws, many of which are inspired by the acquis. This document is the result of extensive consultations with and among the social partners. We expect to transpose the measures listed in the White Paper into legislative measures early in the coming year.

Another chapter under consideration today is that on Competition Policy. Malta is requesting four transition periods in this area, three of which are related to aspects of state aid, together with a request for a three year transition period with regard to the adjustment of the energy state trading monopoly in the importation, stocking and sales of petroleum products. We are currently in the process of finalising the clarifications and justifications for these requests.

While our ultimate objective is to eventually achieve full compliance with the requirements of the acquis, we would however also like to reiterate our conviction that the technical discussions on these points should continue to be accompanied by an awareness of the political sensitivity characterising most of these important issues.

There have been substantial developments in the area of state aid in Malta since the adoption of the first EU Common Position. In the legislative sector in particular there has been the enactment of the Business Promotion Act. In the administrative field there has been the reinforcement of our capacity to monitor state aid through the establishment of the State Aid Monitoring Board which is now fully functional.

The Business Promotion Act represents a landmark development in this respect, departing from the export-based incentives contained in the previous legislation to a more modern package aimed at attracting primarily value-added investment conducive to the application of new technologies and the development of a highly skilled labour force.

We will shortly be sending further clarifications on the tax incentives envisaged in this Act which take account of the handicaps arising from Malta’s size and peripherality, the intrinsic role of the schemes and their duration in addressing these handicaps, as well as the significance of these schemes within the wider framework of Malta’s industrial policy. These issues need to be examined in the context of Malta’s economic development with GDP per capita at just over half the EU average.

The EU Common Position takes note of our request concerning the legitimate expectations of those enterprises which are eligible for aid granted by virtue of the legislation preceding the Business Promotion Act. The points made in the Common Position in this regard are being considered carefully with a view to ascertaining to what extent the solutions being suggested address the requirements dictated by our circumstances. We will continue to consult closely with the Commission services over the next few weeks, in order to explore all the possible appropriate solutions.

We welcome the constructive approach adopted by the EU with respect to the state aid being granted to the Maltese shipyards. Substantial progress has been registered in this context since the last EU Common Position, with this matter featuring prominently in the Government’s agenda over the last months. This has led to the recent establishment of a Task Force for the Restructuring of the Maltese Shipyards, under the direct responsibility of the Deputy Prime Minister. The key objective of the Task Force is to present, over the coming days, a concrete and realistic plan aimed at achieving the yards’ financial and economic viability by 2008. We are confident that this strategy, once finalised, will also serve as a solid basis for the intensification of our ongoing consultations with the Commission on this sensitive issue, with a view to reaching a politically and socially acceptable solution on the lines being proposed.

In just two weeks' time the Ministerial session of the Accession Conference will meet to conclude what has been achieved under the Belgian Presidency. We are still working intensively with the Presidency and the Commission to bring to conclusion the remaining work on a number of chapters, including the Free Movement of Capital and Justice and Home Affairs.

Following in the footsteps of the previous presidencies, the Belgian Presidency has played its full role in ensuring these important results. In concluding, I would like to express our appreciation for the support and co-operation we continue to receive from all concerned in the Presidency, Member States, the Council and the Commission.