The Malta Independent 23 July 2019, Tuesday

EC 2019 Country Report: Sustainable long-term growth in Malta deserves attention

Giulia Magri Thursday, 21 March 2019, 13:03 Last update: about 4 months ago

One of the main challenges highlighted in the European Commission’s Malta 2019 Country Report is that the island must ensure that the continuous growth is sustainable in the long term.

Benjamin Angel, Director of the General Economic and Financial Affairs Directorate at the European Commission stressed that Malta must focus attention on the concept of sustainable growth.

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Speaking at an event organised by the European Commission Representation in Malta, Angel said that whilst Malta’s growth performance is increasing and that the GDP is fuelled by the service sector, which includes large growing industries, Malta must be conscious that the financial stability must be continuously monitored and long-term planning is ensured.

“Malta is one of the most open economies in the EU and has a strong performance of international oriented services,” he said.

Angel also highlighted that housing prices continue to increase, and that there was an increase above 5% in 2017 and the first half of 2018. He expressed that such an increase in the house market can lead to issues of affordability and availability of social housing.

“The rising prices in the rental market are already being discussed as a number of people are experiencing and growing concerned.”

The report also highlighted that whilst education is highly invested in Malta, it still faces numerous issues. “The rate of Maltese early school leavers is one of the highest in the EU, and the country also suffers from low participation in adult learning.”

He said that many socioeconomic issues that Malta is currently facing are linked with education, housing issues and the 25% employment gap between men and women.

Sustainable infrastructure is something which needs immediate attention. The Report reflected that Malta is one of the very few countries missing its greenhouse gas emissions targets of 2020 and its recycling rate was lower than 6%. “Such a number marks Malta as one of the worst in Europe. The environmental issues and Malta has to make a big effort.”

Whilst the issue of sustainability was the main theme of the Report, Angel also highlighted that there still is inefficiency in the justice system when it comes to anti-money laundering and corruption. “Malta has gone down significantly in the ranking on transparency. The Commission against Corruption has received more than 500 files and, as far as we know, none of these has led to an actual prosecution.”

Angel said that it is important that the Government sticks to the recommendations of the Venice Commission especially with regards to the anti-money laundering issue.

 

‘Malta aims to grow higher than most advanced countries in the EU’ - Scicluna

Also addressing the event, Finance Minister Edward Scicluna said: “Malta’s aim is to converge with the European Union and it is important that Malta grows higher than other advanced countries in the EU.”

Scicluna said that Malta is currently one of the fastest growing economies and that this does bring certain challenges, which include housing, traffic congestion and more investment in infrastructure. “The EU has provided us with the direction to be able to push Malta to do well and to improve.”

He argued against Celine Gauer, Deputy Secretary General of the European Commission, who had earlier commented that Malta has made “limited process in addressing country-specific recommendations and affective enforcement in anti-money laundering and the fight against corruption”.

Scicluna said that the country’s process was anything but limited and said that “I still remember Malta facing macro-economic unsustainability and severe deficit when I first visited Brussels.”

He said that since then Malta has not stopped working on strengthening its processes. He said that Malta was aware of its weaknesses: “our high demand and reliance on oil for energy, very low female participation rate, very high early school leaving rate and public procurement (…) we took them and addressed them.”

He said that the Commission is not always right, and that there are necessary means of engagement and proving that there was necessary growth.

He explained that Malta’s need for EU funding is not due to greed but because the development is not uniform. “We are very advanced in certain sectors but we are lagging behind in certain developments, like sectors of education and research and development.”

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