2012 sees Denmark once again at the helm of the six-month rotating EU presidency. Its first presidency dates back to 1973 in a much smaller ‘European block’ and its latest was in 2002 heralding in 10 ‘new’ member states.
The shortcomings of the outgoing Polish presidency have been widely publicised abroad due not least to the economic climate and to the climate change talks in Durban, South Africa, with expectations leaning on the Danish presidency. Some may think that what the Danes do not accomplish will then shift to a Cypriot presidency.
We do not seem to have given much direct attention to the incoming presidency in our national press, and yet it is a relatively small member state (even administration-wise) and may be more empathetic to Malta’s positions − on certain dossiers, but ones that may hit close to home for businesses, youth and education for example.
Denmark’s presidency this time round unfolds in a political and economic climate dominated by the euro troubles, the UK stance, as well as Hungary’s constitutional changes. Denmark, like the UK, is a non-euro member state and enjoys three other so-called opt-outs from the Treaties (defence, justice and home affairs, EU citizenship). It also has a relatively new government, with a female prime minister for the first time, a somewhat EU-sceptic parliamentary majority and a non-EU enthusiastic population. President Barroso has said he wants to see a Fiscal Compact completed under the Danes.
The functions of a presidency changed following the Lisbon Treaty and a trio-presidency sets out an 18-month programme. However, each presidency always sets out its six-month priorities covering a broad spectrum and Denmark’s are: a Responsible Europe (relating to euro issues and the EU budget for 2014-2020), a Safe Europe (concerning immigration and border control), a Dynamic Europe (Single Market issues), and, not unexpectedly, a Green Europe. Indeed Denmark has mapped out its sustainability and energy efficiency priorities seeking ultimately to integrate these into EU transport and agriculture policies. Its challenge will be achieving each of the four priorities, without diverting focus from the larger over-arching economic one.
Malta’s challenge will be to map out its own challenges under these four priorities to garner the best results for the country.
Malta must retain its focus on dire issues like immigration, always sensitive and difficult in EU debates and on which Malta and Denmark are not exactly on the same footing. But we should not take a back seat on other priorities; I am thinking of priorities falling under a ‘Dynamic Europe’. These concern small business and the self-employed, education, youth and gender-related issues. The EU’s single market is celebrating 20 years since its launch and a reform of the Single Market is to be discussed during the Danish presidency, including a modernisation if you like incorporating digital development. The financial crises may have put a strain on the single market, but there is much more to it. Twelve priority action areas are the focus of the Single Market Act published last year, and EU leaders pledged to deliver on these during their summit last October. ‘Act’ not as we understand it in legislative terms but rather a made up definition coined by Brussels.
One of the objectives is improving access to finance for small businesses, which is in fact a focus of Malta Enterprise, though there is always room for improvement. Enhancing mobility for citizens, simplifying the system for professional qualifications is another area, as is the digital single market. Another area, which should be of direct relevance to Malta, is the Commission’s intention to simplify accounting rules and reduce administrative burdens for small businesses. Let us not forget about consumer rights in this whole debate; consumers should be well aware of their rights and opportunities in the single market. Governments are always ready to safeguard the basic principles of a single market though they are markedly divided once you start going into substance.
Denmark does want to push forward a business-friendly agenda and growth-enhancing measures. The Danish economy is similar to Malta’s in a way: small, dynamic, open, with a large number of SMEs and start-ups and with high growth firms low compared to other countries. It stepped up its entrepreneurship policy so as to create favourable conditions for all firms and placed entrepreneurship education in Denmark as a priority. Entrepreneurship as a driver of economic growth and employment has been increasingly recognised and it has also recognised the relevance of entrepreneurship and innovation for a small economy in the international value chain. The OECD report on Denmark in this area gives ample detail. However, while Denmark’s small enterprises account for around 97 per cent of its firms, it has a rather small number of micro firms, which in contrast are Malta’s bulk of active firms. Denmark has a higher share of firms with 50+ employees.
There is scope for bringing the business and the education sectors closer. A new programme ‘Education and Training and Youth (2014-2020)’, will start being discussed under the Danish presidency. This is one area where Malta can push forward a clear vision of what it would like to see such a programme encompassing. We need to see more dedication to youth employment and entrepreneurship, as well as overall social inclusion and participation, and space for creativity. We always claim, and rightly so, that people, human resources, are our best asset and we need to continue building on this.
Budget 2011 recognises the need to remove the weaknesses in the country’s business environment, such as by lowering administrative burdens, encouraging high education achievement, further facilitating access to export markets, business support services and business friendly legislation, both in terms of an SME impact assessment being carried out on a draft law and in terms of understanding the law they need to abide by once in force. Indeed these are reflective of a broader European debate. Maltese businesses need to find non-bureaucratic and uncomplicated forms to fill in when submitting applications for projects or programmes, that business support centres are staffed with trained personnel who can offer targeted assistance and that small companies can apply for factory space leasing if they are successful in attaining a substantial project. Basically, that they can reap the benefits of government investment in this area.
President Barroso, ahead of the Informal Summit of 31 January, remarked on Commission proposals to swiftly put measures in place for small businesses, which remain the backbone of the European economy. And these measures include the freeing up of available funding, reducing unnecessary administrative burdens and looking at the problems of late or non-payment of invoices to small companies. The latter accounts for around a quarter of all bankruptcies in Europe. Problems with due payment is also a prevailing problem small companies consistently encounter in Malta, and which in itself hampers their growth or even livelihood.
What does all this say? Malta is well aware of the economic relevance of its business sector, the challenge lies in reconciling these with debates at a European level, in having clear cut and timely negotiating positions to ensure we continue striving to achieve the possible best. I do add however that whilst it is for government, business retains a role in putting forward solid proposals, through existing national fora and business-representative organisations.
One last, but nonetheless important point concerns REACH (chemicals related law) which is due for review and where some small countries are calling for more flexibility. Some may recall, or not, that this is one piece of law on which Malta negotiated vigorously and with efficacy, with its footprint strongly in the legislation finally adopted − and it did so simply because the ground work was done in the very early stages in consideration of small businesses in Malta and because Malta pushed forward sound alternative proposals throughout negotiations. I would love to see Malta again at the forefront of such a debate on small businesses.