The CEO of the Malta Business Bureau, Mario Xuereb, is advocating for the European Union to implement "insularity tests" when considering new directives, to take into account what impact they would have on islands or regions on the periphery of the union.
The Malta Business Bureau (MBB), which was founded in 1996 and is this year celebrating its 30th anniversary, represents the Malta Chamber of Commerce, Enterprise and Industry and the Malta Hotels and Restaurants Association in Brussels. It does so by liaising directly with the European institutions, the Maltese Permanent Representation and with umbrella organisations such as BusinessEurope, which Xuereb said incorporates EU industry federations, EUROCHAMBRES, (which incorporates Chambers of Commerce) and HOTREC (which incorporates organisations representing hotels, restaurants and cafes) on policy and funding issues affecting Maltese business interests.
The MBB had previously said that despite being one of the EU's greatest achievements, the Single Market still presents disproportionate challenges for Malta due to permanent disadvantages linked to the island. Asked, during an interview with The Malta Independent on Sunday, what he believes needs to be done to tackle this issue and bring about a level playingfield, Xuereb said that the single market is the EU's biggest achievement but for it to continue being a driver for growth it needs to ensure fair access for all companies, irrespective of their region of origin, or if they are islands.
Xuereb stressed that it is important for the EU to take into consideration that challenges are disproportionate for certain countries, like Malta, due to the realities that the islands face. He described these disproportionalities as a "tax on geography".
He said that Malta's representatives push the argument that island states should work together to put pressure. At the same time, he said, it is difficult for mainland Europe to understand the different realities that island nations face.
This is why he believes insularity tests would be beneficial, to understand how policies or directives being drafted would affect islands or regions on the periphery of the EU.
Asked whether there are any EU policies being drafted which he believes need to be modified to take Malta's realities into account, Xuereb said that every legislation that is created should take into account the realities of islands.
"There are a number of initiatives coming up this year - the Public Procurement Act, the Circular Economy Act, the Digital Omnibus - but in each initiative how islands are effected needs to be considered," he said.
Connectivity issues
Currently, an Islands' strategy, which is still on paper, is being discussed by the EU Commission, Xuereb said.
"We expect a formal recognition of the geographic and permanent constraints faced by islands such as Malta, together with clear indications of remedial action to ensure that islands can (i) fully benefit from EU initiatives, including the Single Market, and (ii) effectively mitigate the impact of EU legislation, particularly measures affecting maritime and aviation transport (but not only)."
"Those who live on the continent cannot comprehend the challenges and what it means to live on an island. So we try to explain the issues we face regarding connectivity, that imports and exports have to be done through sea transport."
"In a meeting we recently took part in, the issue of connectivity arose, and something we always bring up in EU fora is the need to take Malta's connectivity issues into account. One of our team members was speaking about Malta's insularity and showed the recent images of Maltese supermarkets with empty shelves where produce is usually displayed. The photos were taken following a storm a few weeks ago. When you show people something visual like that, it is striking, and it sparked a discussion there and then. We need to convince and show, with evidence and with data, the issues the country faces."
'A one-size-fits-all cannot apply'
Currently, he said, the Von der Leyen Commission is putting emphasis in competitiveness and simplification.
With regards to competitiveness, he is referring to the competitiveness of EU businesses vis-à-vis other companies around the world. Here, he said that competitiveness for Maltese businesses is also affected by the added connectivity burden.
"The EU has to realise that a one-size-fits-all cannot apply, and that is why it is important that we continue talking about that. To be competitive, everyone must benefit from the single market equally. It is one thing being in the industrial heartland of Germany, and another to be in a remote area in a region on the periphery of Europe or on islands."
On the issue of simplification, the previous European Commission led by Von der Leyen introduced regulations regarding reporting requirements for companies, he said.
Here, he mentioned environmental aims for companies, "which we don't oppose and understand that it is important that they be met. But they were adding burdens onto companies through the amount of reporting needed to show that they are meeting their targets. The new Von der Leyen Commission, due to the way the EU political scenario is changing and also due to geopolitical issues, realised that there is a need to reduce the burden on companies. There are now situations where the Commission is pushing the one-in one-out principle, where if a burden is placed on companies to report something, then an equivalent burden should be lifted."
The Commission is trying to make it easier for companies to conduct business, he said.
Technical ally
The MBB's role is to gather information and data from companies to understand what initiatives they take, see what is being proposed by the EU and explain to companies what these proposals being made are, while showing them what they can do, he said. "It also takes part in EU-funded projects to create tools to help companies take action."
He said that the MBB is also a technical ally to the government and the organisations it represents, as when there is a proposal being drafted, the MBB would base its position on consultations it holds and feedback it receives from the members of the Malta Chamber and the MHRA.
In terms of collaboration with Maltese political representatives, he said that Malta's footprint in Brussels is not large when compared to other countries which have many organisations represented in Brussels. "So the push made by Malta must be collective and collaborative. The MBB is the only organisation in Malta, in our sector, that is present with an office there." He said that the MBB's full complement is nine people, two of whom are based in Brussels.
He stressed the importance of collaborating with the government. "Government might have different priorities from ours since it has a wider remit, but I assure you that we have open communication channels with different ministries in Malta, with Malta's permanent representation to the EU, with other Maltese agencies and organisations. The government comes to us to understand the position of Maltese businesses on proposals being made by the EU Commission and during the varying negotiation stages." He said that the MBB is also in communication with Malta's MEPs, as well as the Maltese EU Commissioner and his team.
He also said that the MBB tries to build alliances and coalitions to help others understand Malta's situation. Aside from attending meetings organised by BusinessEurope, EUROCHAMBRES and HOTREC, the MBB also puts forward proposals and ensures that they are discussed.
The majority of Malta's businesses are SMEs. "They seek information and the MBB delivers the information. It is in their interest to follow what is being proposed. We are here to give them direction."
He said that the MBB participates in projects to help SMEs, not only in terms of capacity building, but also to help them understand what initiatives are available and how to tackle certain proposals by the European Commission.
Digital sector
Asked what economic niches he believes Malta should focus on for the future, he mentioned the digital sector.
Currently, he said, Malta offers many services, such as financial services, tourism, and so on. But he said that if Malta also focuses on the digital sector, particularly digital services that can be provided to the different sectors, he believes it can thrive.
He said that there are many start-ups in Malta focused on the digital sphere, and also mentioned the ecosystem being created by government in terms of support for them, adding that this can be a sector where Malta can really focus on. As one example, he mentioned cybersecurity.
A policy causing concern
Asked whether there is any piece of EU legislation being discussed which is particularly concerning for the MBB, he mentioned an EU proposal regarding Clean Corporate Vehicles. "From the discussions we had with our partners, as well as with representatives from Malta's transport sector, it became clear that this was being designed in a way that could force companies operating heavy vehicles to switch their entire fleets to electric. That in itself is not bad on paper, but brings with it pressures to invest in larger spaces where they could install the required electric infrastructure for it. Space in Malta is what it is. So while on paper it sounds good, in Malta the space is what it is. What will you do, expand their depots to include charging infrastructure?"
"This was being discussed and, by speaking to people within the European Commission and together with others also speaking up about it, our concerns were heard. Current indications suggest that it will not be mandatory for heavy vehicles. This was worrying us. It doesn't mean we are out of the woods, but we made a step forward."
An important initiative
Speaking about the Pact for the Mediterranean, he described it as a very important initiative which the MBB is closely following. The MBB describes the pact as one which aims to improve collaboration between Mediterranean neighbours through three pillars: People, Strong Economies and Security.
"For Malta, the Pact for the Mediterranean offers tangible economic benefits through its potential to strengthen trade links, improve connectivity, and positioning the island as a key bridge between Europe and the southern Mediterranean. The pact can open new market opportunities for Maltese businesses, particularly in services, logistics, tourism, and energy. In terms of EU policy goals, enhanced cooperation on infrastructure and energy interconnections would also greatly help meet our targets."
He said that Malta's geographical position, and historic good relations with North African countries, are beneficial in this regard.