The Maltese economy continues to transform itself at a rapid pace and a number of fiscal indicators reveal an improvement in the deficit situation which, combined with a modest inflation rate, should result in euro adoption on the targeted date, according to the president of the Malta Employers Association, Pierre Fava.

Mr Fava was addressing the association’s 42nd annual general meeting at the Corinthia Palace Hotel in Attard.

He said the past year has been positive for the MEA and the high level of activity was a reflection of the rapid restructuring in the country.

The MEA’s general conference focused on “flexicurity”, something being discussed at European level and which the association has been promoting as a means of introducing a more flexible and adaptable labour market.

“As economies, including ours, are being subjected to rapid changes in an increasingly globalised world, there are fewer job-for-life opportunities, and employability depends on the extent to which one can move from one occupation to another,” said Mr Fava.

Speaking about the nature of employment in Malta, Mr Fava said there needed to be stricter measures for abusers and remuneration packages should reflect the level of responsibility and productivity that different jobs entailed.

Mr Fava referred to the economic and financial situation of the country, saying that the real GDP growth of three per cent in 2006 revealed an increase in economic activity that the association believed would be sustained and ideally enhanced this year.

“This has partly been achieved by means of controllable factors such as better management of government finances and a sustained reduction in public sector employment over the past few years,” he said.

Among the external developments that had an effect on the country’s economy and financial situation, Mr Fava mentioned the falling oil prices last year.

He said that “the increasing current account balance, however, points to a vulnerability that needs to be addressed for sustained economic growth”. This may be achieved by means of improved export performance and foreign currency earnings, he said.

Mr Fava expressed concern that despite substantial investments in education, many students were completing secondary school without having achieved basic literary skills.

Employers were also being faced with people with few or no skills, a factor that threatened to push up labour costs, he said, adding that it was envisaged there would be a higher demand for foreign employees in the coming years.