Minister of Finance and Commerce addresses EU-MALTA Joint Parliamentary Meeting in Strasbourg

The Minister of Finance and Commerce, the Hon. Leo Brincat, today addressed the Malta-European Parliament meeting, in Strasbourg. The Minister's speech is as follows.

"Government began holding consultations with the Maltese constituted bodies over the establishment of a Free Trade Area between Malta and the European Union even before the Commission's Communication had been concluded.

It is Government's intention to see a tandem evolving between Economic liberalisation the restructuring process and the E.U. Free Trade Zone.

Given that any restructuring process can be painful for some sectors government is determined to carry out such a process in tandem with the constituted bodies at a pace and tempo which should be mutually agreed.

The whole scope of this exercise is to render our industrial base competitive over the long term.

We intend to use one fifth of our privatisation proceeds together with EU funds in order to meet the requirements of such a restructuring process.

It is for this purpose that we set up IPSE to ensure that the restructuring of our private domestic industry is carefully designed and implemented and that such assistance speeds rather than postpones needed adjustment.

As has been recently pointed out, it is important that such funds are not allocated to firms with no prospects for restructuring nor should they be given to enterprises to buy time rather than efficiency.

We are setting out to achieve these goals without creating any additional direct or contingent budgetary liabilities more so in view of the cloud of the tight fiscal budget deficit under which we are presently operating.

Prior to the last elections a Ramboll report on industry had been drawn up. But given the fast approach of the elections very little discussion had taken place about its findings. Predictably none of its recommendations regarding restructuring had seen the light of day, then. One important lesson is to be learnt from the Ramboll report. That is that we should gear up to be able to meet the challenges of a more open general trade environment regardless of whether we opt for full EU membership or not.

It is also important that negotiations with the Union over the free trade area should allow Government to negotiate an asymmetric agreement on the phasing out of import levies and other trade barriers.

The Maltese Chamber of Commerce itself had publicly expressed itself in January that it would be crucial for Malta to strike an agreement binding the EU to dismantle its barriers at a faster rate than Malta.

Restructuring should have been on our agenda ages ago, but, unfortunately, government was then hell bent on seeking membership at all costs without finding the time, space or urge to get a national debate going on such issues. It is no coincidence that inspite of being pro-membership the constituted bodies in Malta recently expressed the view that they have never been consulted on EU matters by the government of the day as they have been in recent weeks.

We feel that rather than adopting a take it or leave it attitude the Brussels proposals have offered a serious base for negotiations between the two sides.

The Brussels communication has shown that a third way is possible in our future relations with the Union. The whole argument that you are either in or out has proved to be fallacious and over simplistic.

We also feel that the three year deadline set by Brussels for the FTZ accord is merely the point of departure for the forthcoming negotiations.

On a national level we consider Labour's option to be the least divisive of the two, because in its pursuit of a free trade zone accord with the Union while not considering full membership in the foreseeable future it is leaving the door open for future administrations to pursue and deepen European relations as they may deem fit."