Needed changes to the ways by which the insurance sector conducts its business are being introduced by the European Commission across the EU. All agree that these changes are for the good. The Commision is however insisting they should come into effect by a certain date.

Players in the sector range from very big companies to smaller entities to very small units. In Malta the latter constitute the huge majority. They will need to commit to expenditures, for them signficant, in order to conform to the directive that the Commission will be issuing. For them though, the problem is that they will not be able to change their administrative systems in time to observe the date set by the Commission for completion of its reforms. They are requesting a delay... which is hardly out of this world.

So here we get again another instance of a prevailing European syndrome: that of insisting on one-size-fits-all approaches. In recent years, there was a decline in that infectious fever but it is still there, mainly to restrain the smaller members of the Union. The bigger members can play it better; their say-no could be understood as a threat to prevent the implementation of a proposal unless it is suitably amended. Which means that their views are fully taken into account.    

***

MEUSAC

I attended a meeting of MEUSAC, the council which examines EU-Malta issues and in which participate government’s representatives as well as those coming from the island’s economic and social constituted bodies.

The reforms that are being proposed for the eurozone were on the agenda. It is a crucial subject for Malta even if we do not seem to be much aware of the stakes involved. It seems like we have become resigned to the fact that we need to follow in the footsteps of the other eurozone members, with the larger ones at the front.

Indeed, that is what we have done up to now – on decisions ranging from how Greece has been dealt with, to others that concern how the national budgets of member states get evaluated and corrected.

Some of the proposals under review will centralize and reinforce management powers over the euro.

If they go through (which at present sounds not so probable), for us the euro currency will hardly be any different from sterling, when it too was our national currency.

***

Budget 2018

At a time when the economy keeps rolling forward – as has happened this year – the dilemmas that arise when drafting the budget are different from the “usual” ones, involving where and how to economize. But they still remain very difficult.

In first place, one cannot banish from the process the drive to economize. An enormous challenge in such a budget is not to let waste accelerate on the back of the economic momentum. How can such a goal be reached?

Then there come the choices that need to be made regarding how to merge and mix the available options. How to balance a rise in expenditure that is necessary but politically unrewarding, with a rise in spending on less useful projects which afford a good political payback. How to evaluate commitments in favour of long term projects having dim prospects of success but that could generate very good results in the future if successful, by contrast with options that make for surefire results delivered very very slowly. How to decide between less tax or more government expenditures. How to draw a line between what is popular but less than useful, and what gives proof of prudence while running the risk of being judged stingy.