On not resting on our laurels
We are giving today quite an extensive coverage to the government’s Economic Partnership Programme and its Report on Effective Action that it has presented to the European Commission.
The Council Recommendation issued on 21 June 2013 gave Malta a deadline of 1 October 2013 to take effective action and to report in detail on the envisaged consolidation strategy to achieve the recommended general government targets for 2013 and 2014 specified in the Council recommendation.
The report also includes the targets for government expenditure and revenue and outlines the discretionary measures on both the expenditure and the revenue side that are being taken or planned to comply with the recommended adjustment path.
The Commission will now examine the report with a view to assessing whether Malta is complying with the Council recommendation. This assessment will be published by the end of November.
In addition to the report on action taken, Malta had to submit two other documents: i) an ‘Economic Partnership Programme’, by 1 October, detailing the structural reforms that are deemed necessary to support an effective and durable correction of the excessive deficit, and ii) the draft budgetary plan for 2014 by 15 October.
The first report has been submitted too.
The Commission shall adopt an opinion on the draft budgetary plan as soon as possible and in any event by 30 November.
So far this long report has barely been examined by the country at large save for some comments by experts in the field.
The Opposition has come out with largely predictable political comments regarding what it considers as government U-turns with regard to the increase in indirect taxation and with regards to cuts in expenditure.
It has also highlighted the words in this report about the muchmaligned BWSC extension at Delimara which show how this plant, maligned by the government while in Opposition as a ‘factory of cancer’ is saving Enemalta huge sums of money.
Now, according to the new system of governance in the EU, the Commission will come up with its analysis and maybe too with its additional requests. It will only be after this that the government will be able to present its Budget.
Beyond the immediate partisan points that inevitably will be made, the first reaction by this paper is that, generally speaking, the Programme seems to address the fundamental need of the Maltese economy – that is, to stop the trend towards a higher deficit and to address the competitive issues that beset the Maltese economy.
At the back of the government
In addition to the report on action taken, Malta had to submit two other documents: i) an ‘Economic Partnership Programme’, by 1 October, detailing the structural reforms that are deemed necessary to support an effective and durable correction of the excessive deficit, and ii) the draft budgetary plan for 2014 by 15 October.
programme, if we understand it correctly, there is a realization that increased costs must be reduced, that government expenditure must be curbed and that government revenue, in the face of so many electoral pledges, must be somehow increased.
Beyond that, the present administration is also tackling issues of further inward investment and spreading the nets wider than the EU, at present still in intensive therapy following the 2008 crisis.
Once again, it must be emphasized that the aim of this new EU governance exercise is not to be in thrall of some idealistic economic goal but rather to prevent Malta from sliding down the slippery slope that other, far bigger countries, have succumbed to.
There is also the concomitant factor that sooner or later Malta will be hived off the EU’s bountiful breast of structural funds and must seek to become more selfreliant.
Thirdly, the tasks outlined by the documents sent to Brussels are strategic and structural and also, may be add, long-outstanding.
This is a time of great seriousness. The posturing of parties in pre-electoral hype must give way to serious planning of how the country must tackle the issues ahead.
If this programme undermines or goes against the spin generated in the pre-electoral period, then so be it. It is more important for the country to get its goals in line than to be tied to a make-believe dream that is just not on. It is also more important for the country to set its economic goals clearly and to abide by them come rain or shine than to continue to live in a dreamworld that is never true.