In our electoral manifesto we promised to invest in the productive sectors that will bring about economic growth, generate work and create employment opportunities.  We also committed ourselves to give economic direction and provide ample room for manoeuvre to the private sector and the self-employed which ultimately are the main motor of the economy.  I do believe that it should be the private sector and not the public sector that should create employment opportunities for our work force.   

We intend to achieve these aims by supporting the self-employed as well as small and medium sized enterprises by making available to them investment funds and financing instruments to enable them to expand their operations and thus create jobs and generate wealth.  We are targeting various sectors which will eventually lead to the creation of good quality jobs including the digital economy, ICT, manufacturing with high added value, maritime and aviation activities and tourism among others.  We are also encouraging investments in education, research and development and innovation.  

Through the utilisation of EU funds we have been able to inject financial resources in a number of these areas of our economy.  In particular we have been encouraging the uptake of funds through investments supported by the European Regional Development Fund (ERDF) the Cohesion Fund and the European Social Fund. 

ERDF funds have been the largest financial instrument benefitting the private sector. To show the impact that financial instruments can have in stimulating investment reference should be made to the current financial programming period 2007-2013 were financial instruments represented 12% of the €80 million in direct assistance to enterprises supporting more than 600 actions.

Earlier this week, I announced two major projects that together will benefit from €8 million under the ERDF and are expected to generate good quality jobs.

One of these is the development of the Safi Aviation Park.  More than €3.6million will be used for the construction of three new hangars for the maintenance, repair and overhaul facilities for small jets together with the improvement of the basic infrastructure at the park including taxiway, aprons and service infrastructure. This project is expected to create 8 new jobs by 2015 increasing to 24 by 2019.

Another project that will benefit from this ERDF allocation is the development of a Digital Hub. Under this project, for which the sum of €4.4 million is being allocated, joint actions in the creative sectors will be established as well as the creation of the environment and structure for the training and monitoring of new enterprises. 

This project provides also for the carrying out of a study to determine the economic potential as well as the technical, financial and economic feasibility of the laying and operating of a secondary data cable between Malta and Gozo which is the basis to assess the possibility of creating a creative cluster in Gozo.  This project is expected to generate 60 new jobs by 2015 increasing to 120 when the project is running at full capacity.

But perhaps the most important development this week in respect of financial support to private enterprise for the creation of employment opportunities was the extension by a further €2 million of the Fund that goes by the name of Jeremie (Joint European Resources for Micro and Medium Enterprises). Government’s pledge of these additional €2 million will have a leverage effect of more than €11 million that will be made available to about 100 SMEs.

JEREMIE is a financing instrument that provides assistance in the form of loans, guarantees and equity investments in Small and Medium Sized Enterprises.  This scheme was launched in 2010 to facilitate SMEs access to finance through the implementation of a first loss portfolio guarantee scheme.  The uniqueness of this financing instrument lies in the fact that any amount pledged to the fund is leveraged by five times by a local financial institution managing the fund which, in the case of Malta is the Bank of Valletta.

Government’s decision to extend the Jeremie Fund comes in the wake of the success achieved following the first tranche of Jeremie allocation.  The EU programming period 2007-2013 was the first time that Financial Engineering using Structural Funds was used. As at end of June 2013, six hundred and two loan facilities were granted to five hundred and thirty-three different Maltese SMEs for the value of €48.6 million of the €51.4 million portfolio created by the €10 million that had been pledge by Government.  This investment is thought to have given rise to an investment within the economy of €83.5 million from the initial investment of the €10 million from ERDF and national funds.

The extension of the Jeremie Fund was welcomed by none other than the GRTU which represents SMEs calling it very good news.  Even the European Investment Bank (EIB) which is implementing the scheme through the European Investment Fund as the EIB’s holding fund manager, has praised Malta for the success it has achieved in the administration of the Jeremie Fund.

Together with the other financing instruments and support schemes, the Jeremie extension is sending the signal that the Government is committed to continue supporting SMEs that are the backbone of our economy and the creators of wealth and good quality jobs.

Dr Ian Borg is the Parliamentary Secretary for EU Presidency 2017 and EU Funds.