Once the service sector is fully liberalised it would be much easier for other member states’ services providers to take up contract work in Malta than for Maltese contractors to take up work in other EU member states. Our enterprises in the services sector are simply not geared for this, the GRTU added.
The Malta Development Corporation and METCO
previously, and to a great extent Malta Enterprise, have only assisted manufacturers. ‘Export’ for the services sector is limited to few companies who have the capability to work abroad.
Malta will therefore suffer economically, as the balance will be adverse to Malta. This directive would completely liberalise the market for all services like estate agencies, recruitment agencies and professional services, besides retailing, wholesaling, trading, repair works, construction works, internal decorations and fittings and all form of service provision including all work of the self-employed except transport, telecommunication and specifically regulated sectors.
This is a great threat for Maltese labour, the GRTU added. It is also a threat for our GDP as our GDP is essentially the earnings from employment and the income of our enterprise owners.
If work is delivered by foreigners who come to Malta for short stays, who spend very little here and expatriate their earnings while most of the payments are made abroad, the multiplier effect of the loss of earnings will hit the Malta market very hard, the GRTU said.
Under the Services Directive, recruitment agencies from other member states could recruit workers from third party countries and transfer them to Malta to take up services contracts in our factories, hotels and hospitals, including supply of labour services. This is a far greater liberalisation than what exists now. Furthermore, foreign providers working in Malta will be guided by the rules of the country of origin and not of Malta.
GRTU believes the government is taking this threat very lightly. That is why in the conference the Services Directive held last week, GRTU director general Vince Farrugia said the GRTU was demanding that the government objects to the implementation of the Service Directives before the year 2010.
Mr Farrugia said that GRTU expects that by that time government would have obtained sufficient funds from the EU to sustain Maltese services providers to empower them to take up work in the EU countries. He reminded the government that though this proposed directive has been on the EU Agenda since 2002, nothing was said about it prior to the EU Referendum.
The GRTU contends that in the current economic situation with stagnant GDP growth, the implementation of the Service Directive by 2006 as proposed by the EU would create serious economic problems for Malta and this would make the targets of the National Action Plan for Employment even harder to achieve as Maltese investors would be less willing to risk investing in Malta.
The GRTU is demanding the drawing up of a serious social and economic impact assessment analysis before government decides on this directive. It is also requesting greater participation and debate on this directive as practically no service provider in Malta is aware of the directive and of its implications.The chamber is not against the directive in principle, as eventually Maltese service providers will need to take up their share of work from the enlarged internal EU market, but 2006 is far too early for Maltese enterprises to compete effectively.
The GRTU is appealing to the government to obtain all the necessary safeguards prior to the implementation of this directive in Malta.