STATEMENT BY MR. RICHARD CACHIA CARUANA AT THE MALTA BUSINESS WEEKLY BREAKFAST MEETING - HOTEL LE MERIDIEN PHOENICIA

Let me start by thanking the Malta Business Weekly and Le Meridien Phoenicia for this opportunity to review the current state of play in Malta’s EU accession negotiations. It is a particularly significant moment in which to engage in such an exercise.

The Swedish Presidency is drawing to a close and Belgium is waiting to take over the mantle for the next six months.

The Accession Conference at Deputies’ level has only yesterday confirmed that seventeen of the twenty-nine chapters open for negotiations have been completed, thereby reaching and passing the halfway point.

In terms of the time taken to reach this stage, we are also at mid-point, sixteen months into the negotiations and about that distance from their expected conclusion during the latter months of 2002.

Moreover the negotiations have reached a more interesting stage. First of all Malta has gained agreement on transitional arrangements in two of the chapters that have been provisionally closed. Of particular satisfaction, and perhaps more significant, is the fact that our request for safeguards on the free movement of workers has been agreed to. But I will return to this issue later on.

You may ask why I chose to refer to this stage of negotiations as being more interesting than others. This is because the closer we get to the end, the more relevant are the steps being taken, and this not only because the issues being dealt with are far more complex and sensitive. With the deliberations on the various special arrangements being requested, the negotiations become more achievement-oriented.

Underpinning the whole process, however, is the less interesting but none the less necessary background work that is being done in our Ministries and Departments here, all our non-governmental associations, unions and organisations that are an integral part of the process, the European Commission as well as in EU member states.

The various Ministries and Departments of Government are the hands and feet of the process. They have been faced with a task, the like of which has never been taken on in our country. It is worth registering the fact that, problems and all, they are proving equal to the challenges being tackled every day. One statistic is of particular relevance: over four hundred and fifty public officials are directly involved in the accession process.

It is these people who are responsible for ensuring that all aspects of EU law are examined and their implications, both positive and negative, are catered for. They will likewise be responsible for the implementation of those commitments which this process requires.

Their work has been admirably supported by a wide spectrum of non-governmental bodies, many of whom I see represented here today, who are constructively involved in the process. Let us hope that this spirit of consultation and co-operation between the public and private sectors, which we must all admit is new to Malta on this scale, is here to stay.

But let us get back to our mid-term stock-taking exercise. We have opened 28 of the 29 substantive chapters and closed seventeen. These closures have occurred as follows: seven chapters under the Portuguese Presidency during the first four and a half months of negotiations, five chapters during the French term-in-office and a further five during the past six months of Swedish stewardship.

Our unfortunate focus on negotiating chapters suggests that the pace is slowing down. This would be wrong for two reasons: one, not all chapters are of equal importance or of equal volume; two, significant progress has been achieved in a number of other crucial chapters, even though they have not yet been provisionally closed.

Let me summarise what stage we have really reached:

The EU’s body of laws has as its basis four freedoms: the free movement of goods, the free movement of persons, the freedom to provide services and the free movement of capital. We have provisionally closed negotiations on all but the free movement of capital and, here, the only item outstanding is our request to retain controls on the purchase of secondary homes in Malta.

There are three other areas fundamental to the single market: competition, customs and taxation. The discussions on competition will be lengthy, due to our requests for special arrangements concerning the dockyards, and are unlikely to be completed before next year. The negotiations on customs are almost concluded. The negotiations on taxation will focus on our requests for special arrangements concerning value added tax.

Though limited in economic importance for Malta, the agricultural and fisheries chapters are important negotiating chapters. For us because of our desire to foster viable farming and fishing in the Maltese islands, for the Union because it spends half its budget in this area. Our negotiations on the fisheries chapter are proceeding and we hope to make substantial progress in the next few months. The principal issue on our side is the request to manage the 25 miles around Malta as a conservation zone. Negotiations on the agriculture chapter should start in the coming months.

There are four chapters which concern business efficiency, trade and new investment: company law, industrial policy, small and medium-sized enterprises and external relations. Closely related are the three chapters on science and research, education and training, economic and monetary union. We have closed all of them.

There are three chapters which concern the country’s physical infrastructure: energy, telecommunications and transport. Energy and telecommunications have been closed and we are in the final negotiation stages of the transport chapter which, due to the maritime sector, has had various difficulties.

Four chapters concern social and environment questions. We have closed culture and audvisual policy and consumer and health protection. Discussions on the social policy chapter are advanced and currently focusing on the length of our working week. The environment negotiations should see major developments once our new Environment Protection Act is in place.

There are four chapters that concern certain aspects of the internal workings of the Union and the distribution of resources within the Union. In this area we have ended negotiations on statistics and financial control. The discussions on regional policy and financial and budgetary provisions will be among the last to be closed.

Discussions have also been concluded on the Common Foreign and Security Policy, ending the local speculation on our neutrality provisions, and they are all but concluded in the newest area of the EU policy, that of Justice and Home Affairs.

This means that the five most complex chapters will be finalised during 2002. These are Agriculture, Competition, Taxation, Regional Policy and Financial and Budgetary Provisions. We will be prepared for membership, as targeted, on 1 January 2003 and should enlargement occur later, it will be for reasons that have nothing to do with Malta’s state of preparedness.

I would like to take a few minutes to consider the most recent step along our way and that is our request for safeguards within the context of the free movement of workers. I would dare to call this achievement historic, because it is the first time a candidate country has sought and obtained an arrangement of this nature. It is significant for so many reasons.

First of all, it sends a clear signal to us that the European Union understands our request and realises the specific needs of our country.

Secondly it is evidence of the trust and goodwill Malta enjoys. I reach this conclusion because the Union has agreed that in urgent and exceptional cases, Malta may suspend full application of the acquis, followed by a reasoned notification of the motivations behind such suspension. This means that Malta will itself be able to assess the manner in which the labour market will be adapting to the free movement of workers and will be able to act accordingly.

The Government remains of the opinion that the economic growth brought about by accession will mean that any labour movement into Malta can be sustained. Since it was evident, however, that many people were apprehensive of this prospect, it was felt that it was imperative to address this issue.

You would be correct to point out that this measure will apply for seven years, but the time beyond is also catered for. The European Union has agreed that a joint declaration will be annexed to Malta’s Treaty of Accession specifically providing that Malta may raise concerns related to the free movement of workers before the institutions of the Union.

This agreement says a lot about the kind of Union that Malta is joining. It is also evidence of the fact that in the process of negotiations, new and creative solutions can be found to solve complex issues.

In asking for this and other arrangements, we have been particularly careful to ensure that we are focussing on the specific concerns arising from Malta’s own particular circumstances and that we are applying the most appropriate remedies in their regard.

In effect, the nature of the accession negotiations is such that the exercise is much more of a joint venture than a contest of wills. The Union – and by this I mean both the Commission and the member states – recognise that we are involved in an inexorable process that will make us their partners in a very short time. They are as interested and committed as we are in ensuring that Malta becomes a vital and effective part of the Union from the first day of membership.

Although people talk about there being so many years to go before the next enlargement, the fact is that it cannot be delayed too long. This was reaffirmed in the strongest terms during the European Council held in Gothenburg ten days ago. The commitment towards enlargement remains one of the keystones of EU policy and we all need to register the fact that negotiations are expected to end in eighteen months’ time.

Despite the fact that we are not yet a member state of the European Union, we are already being consulted on the future construction of the Union. The current members are clearly aware that as prospective participants in the European project, we have a contribution to give. In fact, the Minister of Foreign Affairs has spoken just two days ago at a Colloquium in Brussels on the Future of Europe. It is significant that the candidate states have been invited to participate in this debate, a fact underlined by Minister Borg in his contribution to the discussion.

In my opinion, the European Union is a natural home for us, one we can truly participate in irrespective of any actual or perceived limitations. I do not in any way wish to suggest that there are not going to be issues or problems either along the route or after membership. There will be. But the structures of this partnership that is the European Union will allow us Maltese not just to cope but to thrive.