SPEECH BY THE HON EDWARD FENECH-ADAMI, PRIME MINISTER, AT THE CONFERENCE OF THE MALTA CHAMBER OF COMMERCE "NEGOTIATING THE FOUR FREEDOMS"

Today we have been considering what is, perhaps, the most tangible and recognisable expression of the European Union in its present stage of development. The four freedoms and the manner in which they characterise the single market constitute both a culmination of four decades of work towards European integration, as well as a solid platform for further progress.

The question of how to define, and in the final analysis understand, the European Union can be answered at different levels.

Firstly, it can be defined and understood at a historical level. At this level the European Union can be seen as a deliberate attempt to galvanise the positive and creative elements of the European historical experience ? its humanistic thrust, its attachment to the rule of law, its entrepreneurial spirit, its inventiveness and sense of adventure, its artistic and scientific genius - in a concerted effort to suppress, and eventually eliminate, those negative elements which over the centuries have given rise to so much division, conflict and bloodshed on our continent.

At another level, the European Union can also be defined in terms of its functionality. In one respect the Union is a supreme and highly successful experiment in regional cooperation. It is bringing an ever-growing number of nations together in a very intensive and far-reaching exercise towards functional cooperation over a whole range of sectors ? economic, social, cultural and political.

At yet another level, the Union can be defined in terms of a vision ? a vision to forge a sense of unity and common purpose based on shared values, concerns and aspirations.

The founding fathers did not seek to pre-determine which of these various strands would primarily characterise the Community they sought to create. Rather they concentrated their efforts on launching a process which, as it unfolded over the years, would derive inspiration and sustenance as much from the visionary, as from the pragmatic aspects that went into its origins.

The stage which this process has reached today is in many ways reflected in the single market as it is given shape by the manner in which the four freedoms are implemented. On the one hand, the affirmation of the four freedoms characterises a unified economic space in which over two hundred and seventy-five million individuals work together on the basis of equality of rights, of opportunities and of responsibilities.

On the other hand, the four freedoms are circumscribed by constraints arising from the objective economic, social and other imperatives of any market economy, including considerations relating to social justice, fair competition, and security. They also take into account that the Union is composed of a group of separate states that bring their own distinctiveness and individuality to the equation. Hence the absolute need for the application of the principle of subsidiarity.

In seeking to become a member of the Union, Malta is therefore sending a message that it is willing and able to operate within this single market on the basis of full equality. Those who seek to understand the implications of membership could do no better than to understand what the single market implies in terms of their day-to-day activities.

They will find that the new environment in which they will operate when Malta joins the Union will offer both opportunities, as well as challenges. The question which is often asked is whether this new environment will work to the economic advantage of this or that entrepreneur, or this or that worker. Posing the question in this way is fundamentally misleading, because it assumes that we have a choice between remaining as we are or embarking upon an adventure into the unknown. Both aspects of this assumption are incorrect.

The world is fast changing around us, and the option of remaining as we are is a dangerous illusion. Within a few years the electronic revolution will have significantly overturned present methods of doing business, of seeking employment and of satisfying material needs. Those who seek to perpetuate any advantages they currently enjoy under existing methods of protection or privilege will find themselves in a position similar to trying to hold back a flood with their bare hands. The signs are already clearly with us. The White Paper, recently published, on the vision and strategy for the attainment of electronic government, outlines how much this is so, as well as the action we must take at both the public and private level.

At the same time, any notion that joining the European Union is a journey into the unknown is equally misguided. As you have heard today, the single market is a very specific environment with well-defined conditions and terms of reference. The opportunities to examine these conditions in detail, in any given sphere of economic activity, are today readily available in a multiplicity of ways.

The correct way to pose the question is to ask which direction Malta needs to take to advance its economic and other interests in face of the enormous changes taking place around us. Posing the question in this way underlines the obvious fact that we cannot remain static. The way forward lies in choosing between the alternatives, each of which must be weighed in terms of both its risks and its advantages.

Any attempt to concentrate on the risks of any one alternative without balancing them with the risks involved in a competing line of action is both dishonest and harmful. Furthermore, it is important to carefully examine and balance both the disadvantages and advantages, rather than simply focus on the risks, which arise from competing courses of action.

Many of the fears surrounding the application of the four freedoms in the Maltese context strike me as being more a response to the impact of the increasingly globalised economy, than a solid assessment of the impact of EU membership. The fears of small firms geared exclusively to the local market, which are now facing external competition, as well as those of workers, used to single lifelong employment and facing unwelcome dislocation, are typical of this reaction.

External competition is pounding at our door, not necessarily in the shape of EU membership, but in the shape of pervasive new rules of operation in the global market, of more sophisticated consumer demands, of ever new and efficient production and marketing technologies, and of the facility with which jobs can be transferred from one part of the globe to another.

Can one reasonably argue that we can cope better with these challenges on the outside rather than on the inside of the European single market? A single market

with freedoms and constraints primarily geared to enable both small and large European firms to operate successfully in the global economy? A single market in which over ninety-nine percent of firms employ les than fifty people and fifty percent of the labour force is self-employed? A single market which dedicates a significant part of its effort to enhance and improve the viability of its small enterprises and to safeguard the interests and social conditions of both the employed and the unemployed?

Nor can we reasonably ignore the wider advantages that arise from Malta's participation in the European experiment. Participation in the EU will create opportunities for a small state such as ours to take an active part in those economic, social and political decisions that will inevitably shape our future. Investment, especially in the newer services enterprises, will be generated through Malta?s inclusion in the European economic space. Our quality of life and our working and leisure conditions will improve through the adoption of the standards applied in the more advanced economies of Europe. Malta, as a member of the Union, will be called upon to play an enhanced role in regional co-operation and security in the Mediterranean.

I trust that through today?s discussions you have deepened your understanding of some of the fundamental issues in Malta?s quest for EU membership. I hope that you will be encouraged to probe even further into the subject. I remain deeply convinced that the more we collectively, and individually, understand the implications of Malta?s membership in the European Union, the more our appreciation will grow that the alleged alternatives to this membership are illusory.