Edward Scicluna

Kif l-‘ash’ jissarraf f’‘cash’

2010-05-17T21:39:00.003+02:00

www.l-orizzont.com - It-Tnejn, 17 ta' Mejju, 2010

Kmieni l-ġimgħa l-oħra l-kumpanija Awstrijaka li tmexxi l-Ajruport Internazzjonali ta’ Malta (MIA) ħabbret li l-irmied tal-vulkan Iżlandiż fisser telf ta’ 35,000 passiġġier għall-MIA. Wieħed jista’ jimmaġina x’tilfu ajruporti internazzjonali oħrajn ferm u ferm akbar minn tagħna. U waqt li l-MIA kienet qed tħabbar dan, il-vulkan reġa’ żbroffa, b’diversi ajruporti jerġgħu jingħalqu bil-konsegwenza li reġgħu ġew ikkanċellati numru kbir ta’ titjiriet, fosthom anke minn u lejn Malta.

L-aħħar żbroff tal-vulkan Iżlandiż reġa’ qajjem l-irwiefen fi ħdan l-Unjoni Ewropea. L-ispazju tal-ajru hu qasam fejn kull pajjiż jimxi u jadotta legislazzjoni individwali, anke jekk deċiżjoni li jieħu pajjiż A tista’, u fil-fatt taffettwa, lill-pajjiż B.

L-istati membri tal-Unjoni Ewropea ilhom għal snin twal iżommu lura milli jikkonċedu parti mis-sovranità tal-ispazju tal-ajru tagħhom bil-għan li l-ispazju tal-ajru jkun integrat u jitmexxa minn regolatur wieħed. Fin-nuqqas ta’ dan, malli l-vulkan beda joħloq il-problemi li ħoloq, il-Kummissjoni Ewropea sabet ruħha pparalizzata meta ffaċċjata bid-diżordni li żviluppat. Ħafna huma tal-opinjoni li kieku l-ispazju tal-ajru kien taħt il-kontroll ta’ regolatur wieħed il-problema kienet tkun trattata b’mod aktar effiċjenti.

F’sitwazzjoni bħal dik maħluqa mill-vulkan Iżlandiż, l-inċertezzi jridu jissarfu f’riskji kwantitattivi. Xi ħaġa li tkun trid titħalla f’idejn l-esperti biex jiġbru u jipproċessaw informazzjoni xjentifika, bħalma hu r-riskju kkawżat mill-irmied, l-irjieħat, it-temperatura u l-vijabilità tal-magni tal-ajruplani. Id-deċiżjonijiet imbagħad jittieħdu abbażi ta’ dak li jaslu għalih, meqjusin ir-riskji tal-għeluq tal-ajruporti paragunati mar-riskji li taħdem normali.

U hawn tqum il-mistoqsija li qegħdin jagħmlu, u għamlu, bosta. Jekk tali proċess hu xjentifiku, għaliex iwassal għal konklużjonijiet differenti? Għaliex kien hemm kumpaniji tal-ajru li waslu għall-konklużjoni li ma kienx hemm periklu li jtiru waqt li oħrajn ma qablux? Għaliex kien hemm pajjiżi membri li fetħu l-ispazju tal-ajru tagħhom u oħrajn le? Kien l-element finanzjarju li wassal għal ċerti deċiżjonijiet? Għax għalkemm il-proċess hu wieħed xjentifiku, id-deċiżjoni finali tittieħed wara li tkun evalwata l-informazzjoni provduta.

Il-fatt li kull pajjiż membru qiegħed juża metodoloġija differenti għall-ġbir ta’ informazzjoni u evalwar tagħha, iwassal għal regolizazzjoni tal-biċċiet u mhux daqstant funzjonabbli.

Ċertament li mekkaniżmu regolatorju għall-Ewropa kollha fejn jirrigwarda spazju tal-ajru ma kienx se jfisser li ma jitħassrux titjiriet, imma seta’ jgħin biex sitwazzjoni inkonvenjenti għall-aħħar ma tinbidilx fi kriżi, u kriżi mhux żgħira.

Tali sitwazzjoni inkonvenjenti żviluppat fi kriżi għax l-għeluq u l-ftuħ tal-ispazju tal-ajru kienu prerogattiva sħiħa ta’ kull pajjiż membru.

Id-deċiżjonijiet jittieħdu fuq pariri ta’ esperti u regolaturi li ma kellhom ebda inċentiv jaraw il-bżonnijiet ta’ regolaturi nazzjonali oħrajn.

Mingħajr mandatt biex tiġbor lill-bordijiet regolatorji u l-ispazju tal-ajru taħt kappa waħda, l-awtoritajiet Ewropej, f’sitwazzjoni bħal dik ikkawżata mill-vulkan Iż landiz, setgħu biss jaġixxu ta’ intermedjarji.

Madankollu, kull deni ħudu b’ġid. Il-vulkan Iżlandiż u l-effetti tiegħu hu ttamat li jservu ta’ stimulu biex sa tmiem din is-sena tkun iddaħħlet fis-seħħ sistema integrata fost il-pajjiżi membri tal-Unjoni Ewropea li tassigura użu, u kontroll aktar effiċjenti tal-ispazju tal-ajru fl-interess ta’ kulħadd.

B’riżultat tal-falliment ta’ banek Iżlandiżi li fihom intilfu l-miljuni f’depożiti, l-aktar mill-Ingliżi, ir-rimarka ta’ dawk affettwati meta ġew iffaċċjati mill-iżbroff tal-vulkan Eyjafjallajokull kienet tgħid: “Please send us cash not ash.” It-titlu tal-artiklu tal-lum tnebbaħ minn din ir-rimarka.

Baqar mill-Estonja

Il-ġimgħa l-oħra għaddejt jumejn fl-Estonja b’konnessjoni mal-inkarigu li ngħatajt mill-Parlament Ewropew (PE) għal tħejjija ta’ rapport b’konnessjoni mat-talba ta’ dan il-pajjiż biex jissieħeb fiż-Żona Ewro. Apparti l-inkarigu uffiċjali, huwa ovvju li titkellem dwar pajjiżek.

Li ma kontx naf huwa li kien hemm żmien meta Malta impurtat 800 baqra mill-Estonja.

L-Estonja qatt ma kellha ordni daqs hekk kbira f’kolp wieħed. Min-naħa tagħha l-Estonja tistampa l-munita karta, kroon fl-istamperija ta’ De La Rue f’Malta.

Tul il-jumejn li għamilt fl-Estonja kelli diskussjonijiet maċ-Ċermen ta’ żewġ Kumitati tal-Parlament Estonjan, il-Kumitat għall-Affarijiet tal-Unjoni Ewropea u l-Kumitat tal-Finanzi. Laqgħat oħrajn kienu mad-Direttur Ġenerali tal-Istatistika u mad-Deputat Gvernatur u Kap tal-Kumitat għall-Politika Monetarja.

Indirizzajt ukoll konferenza dwar il-munita ewro u finalment kelli laqgħa mal-Ministru tal-Finanzi.

L-ghajnuna lill-Grecja fil-Qorti Germaniza

Il-Qorti Kostituzzjonali Ġermaniża l-ġimgħa l-oħra ċaħdet it-talba għal ħruġ ta’ mandatt temporanju biex il-Ġermanja tinżamm milli tgħin tipparteċipa f’pakkett ta’ għajnuna lill-Greċja biex tinħareġ mill-kriżi ekonomika li tinsab fiha.

Madankollu l-Qorti Kostituzzjonali Ġermaniża se tikkonsidra aktar tard jekk is-sehem Ġermaniż jiksirx trattati Ewropej. Il-każ tressaq quddiem il-Qorti minn grupp akkademiku fformat minn Ewroxettiċi.

Sehem il-Germanja huwa ta’ €22.4 biljun fuq tliet snin.

Janalizzaw il-pjan Spanjol

Il-Ministri tal-Ekonomija u tal-Finanzi tal-Unjoni Ewropea għada se jkunu qegħdin jiltaqgħu biex janalizzaw il-pjan tal-Gvern Spanjol għall-miżuri ta’ awsterità maħsub biex jilqa’ milli Spanja tgħaddi mill-esperjenza Griega.

Wara li dan il-pjan ikun analizzat għada, il-Kummissjoni Ewropea mistennija tagħmel ir-rakkomandazzjonijiet tagħha f’Ġunju li ġej.

Britain enters uncharted territory

2010-05-17T21:37:00.002+02:00

The Times - Saturday, 15th May 2010

For those of us who stayed up until the small hours watching the results unfold, the British general election was enthralling and completely moved along uncharted territory. Several days on, in the cold light of day, this seems to be an election that nobody won.

Gordon Brown's resignation as Prime Minister demonstrates the personal rejection of both him and his government. The Conservatives won the popular vote and 306 seats but, privately, leader David Cameron and, equally importantly, their activists, expected a workable majority of between 15 and 30 seats. To be reduced to forming a new, coalition government by offering Liberal Democrats seats in a new Cabinet, and an offer on reforming the voting system, is a nightmare scenario and Mr Cameron's authority as party leader could be fatally weakened.

On the other side, many Labour supporters regard this result as the great escape. With 258 seats in a hung Parliament, Labour are in a strong position in opposition alongside the left-leaning Scottish and Welsh nationalists and Britain's first Green party MP Caroline Lucas. Still, with a vote share of 29 per cent, it is Labour's worst performance since the Thatcherite 1980s. There can be no escaping that fact.

For the Liberal Democrats, however, this is the one that got away. Their leader, Nick Clegg, was the star of the campaign, outperforming both Mr Cameron and Mr Brown in the three US-style TV debates. Still, when it came to the crunch, the Liberal vote collapsed to 23 per cent (winning 57 seats) and far from the 30 predicted gains.

For them, the coalition means they are stuck between a rock and a hard place. There are gaping divisions between the two parties. On the issue of Europe the Lib Dems are openly federalist while Mr Cameron, especially with regard to the euro, makes Margaret Thatcher look like a diehard Europhile! Lib Dem economics spokesman Vince Cable, now a Cabinet minister responsible for banking reform, has been vocally criticising Britain's financiers for years.

But if the Lib Dems were the ones to wreck the coalition, they would face the charge that, with Britain needing to take measures to cut its £160 billion deficit, they had shown themselves too childish to provide a stable government.

On the other hand, accepting a deal involving a few Cabinet positions with the Conservatives will leave thousands of Lib Dem activists feeling bitterly betrayed.

If such a coalition were not to survive, Labour could well be in a perfect position to ram home the message that voting Lib Dem let the Conservatives into Downing Street by the back door and that the Lib Dems (alongside the Conservatives) were responsible for swingeing and unpopular public spending cuts. Labour could be back in power sooner than expected.

It is also worth remembering that most Lib Dem supporters consider themselves to be much closer ideologically to Labour than to the Conservatives. An opinion poll taken on the eve of the election revealed that 43 per cent of Lib Dem voters described themselves as centre-left or left, compared to 29 per cent who described themselves as centrist and just nine per cent who described themselves as centre-right or right.

Tony Blair's former adviser, Alistair Campbell, has already revealed that Labour HQ has been flooded with calls from Lib Dem members seeking to defect to Labour.

The fact is that most Lib Dems are either centrist or left-leaning. As a result, this election should finally end the myth that Britain is a conservative country.

With 52 per cent voting for centrist or left-leaning parties, it clearly is not.

Meanwhile, Mr Brown's resignation as Labour leader plunges the party into a leadership contest. Expect one or even both of the Miliband brothers (David and Ed) to stand, while Ed Balls, widely seen as a divisive figure, John Cruddas and Andy Burnham could also be candidates. David Miliband starts the race as favourite. However, this contest will not be completed for several months.

So, British politics is in a state of flux. How many, if any, of the two remaining party leaders will survive this British tsunami and whether a new voting system will break the centuries-old two-party hold on British politics only the future can tell.

Volcanic ash: an act of God turns to man-made chaos

2010-05-17T21:37:00.001+02:00

The Malta Independent - Monday, 10th May 2010

Now that some of the dust has partly settled, and most of the travellers caught in the chaotic effects of Ejjaffjallajokull are safe at home, it is essential for individual EU member states to engage in critical analysis over their response to the ash cloud crisis.

True, the eruption of Iceland’s volcano was truly an act of God. What followed afterwards in terms of financial and social costs was all man-made. The member states’ procrastination over legislation for an improved pan-European regulatory framework was purely the EU members’ state own making.

For years these same member states have shown reluctance to concede even a token degree of sovereignty in return for an integrated airspace managed by a single regulatory body. As a result, the European Commission was paralysed in the face of increasing disorder. A single regulator managing an integrated European airspace would have been able to mitigate risk in a more efficient manner.

The risk management aims to reduce uncertainty by translating it into quantifiable risks. It involves a complex regulatory system that requires the relegation of a degree of decision-making power from governments to experts.

These experts gather and process scientific information, for example: the risk posed by the ash; winds; temperature; viability of airplane engines, and subsequently process this information using sophisticated mathematical models. Decisions are based on the experts’ conclusion regarding the risk of closure versus the risk of operating as usual.

Of course this begs the question that has been on the minds of many. If the risk assessment process is scientific and standardised through quantification, how and why did it lead to different conclusions? Some airline companies argued that it was safe to fly, other disagreed. At the same time that member states across Europe erratically opened and closed their airspace.

Was it the red ink across their financial book which was triggering some airline’s decisions? No one party was right or wrong. Although risk management is a scientific process, the ultimate decision is a judgment call based on the evaluation of the information available.

The current patchwork of regulatory framework, with each member state using different methodologies for information gathering and evaluation, makes for a fragmented and dysfunctional style of regulation.

While it cannot be argued that a number of delays would not have occurred and some flights would not have been cancelled, a consolidated pan-European regulatory mechanism would have avoided the transformation of an inconvenient situation into a major crisis.

The inconvenient situation was exacerbated into a crisis because the closure and opening of airspace was the complete prerogative of the individual member states. But as in most interdependent networks, one airport’s decision affects many others. The decisions of member states were informed by the advice expressed by their respective national experts and regulators who had no incentive to heed the needs of other national regulators.

Without the regulatory mandate to merge national regulatory boards and sovereign airspace into one integrated framework, EU authorities were limited by their role as intermediaries.

Indeed, this saga serves as a stark reminder that it is in certain areas member states that still hold the strings of power in the European political arena – sometimes at the expense of the ordinary citizen.

At least, the aftermath of the volcano will see a fast-tracking of the pending SES II. The directive will come into effect by 2010 and EU citizens will benefit from an integrated air traffic management system that will ensure a safer and more efficient utilisation of airspace. Furthermore, the revised directive will cap the growth of emissions per flight and will save the taxpayer a potential €2 billion with the possibility for more savings in the long run.

L-istorja Griega għadha tibda

2010-05-17T21:36:00.001+02:00

www.l-orizzont.com - It-Tnejn, 10 ta' Mejju, 2010

BĦAL-LUM ġimgħa tħabbar li l-Unjoni Ewropea approvat pakkett ta’ għajnuna finanzjarja lill-Greċja biex tgħinha toħroġ bil-mod il-mod mill-kriżi ekonomika li tinsab fiha. Pakkett ta’ €110 biljun mifrux fuq tliet snin.

Dak li seħħ fit-toroq tal-Greċja mhux biss qabel bħal-lum ġimgħa, imma anke tul il-ġimgħa li għaddiet, juri li dan il-pakkett ma niżel tajjeb xejn mal-poplu Grieg. Anzi, il-poplu Grieg mhux qed jaċċetta l-parti l-oħra tal-pakkett, il-parti li trid tikkumplimenta l-parti finanzjarja “barranija”, il-parti li jrid jagħmel tajjeb għaliha hu b’sagrifiċċji kbar immens.

Huwa għalhekk li jien tal-fehma li “l-istorja Griega għadha tibda”. U għadha tibda mhux biss fil-konfront tal-Greċja, imma wkoll fil-konfront tal-Unjoni Ewropea nnifisha, partikolarment fejn jikkonċerna t-Trattat ta’ Lisbona. Sadanittant, kellu jittieħed daqstant żmien biex tfassal il-pakkett t’għajnuna?

Nittrattawhom punt punt. Il-pakkett ta’ €110 biljun se jissostanzjawh pajjiżi tal-Unjoni Ewropea, taż-Żona Ewro, u l-Fond Monetarju Internazzjonali (IMF), b’tal-ewwel joħorġu €80 biljun u l-IMF €30 biljun.

Pakkett li qiegħed hemm għad-dispożizzjoni tal-Greċja. Dan bil-għan li jkunu kkalmati s-swieq finanzjarji. Mingħajru l-Greċja ma kinitx se ssib min isellifha u jekk issib, l-imgħax ikun għoli ħafna għax ir-riskju huwa għoli ħafna wkoll.

X’inhi n-naħa l-oħra tal-pakkett? Dak li qed jitlob il-pakkett min-naħa tal-Greċja huwa programm ta’ awsteri tà. Awsterità f’livell ta’ sagrifiċċji kbar mill-poplu Grieg li għadu qatt ma kien hemm bħalhom fl-Unjoni Ewropea. Il-poplu Grieg mhux imdorri jagħmel dawn il-forom ta’ sagrifiċċji. Sagrifiċċji li forsi jkunu aċċettati fi stat ta’ gwerra. Imma mhux fi żmien ta’ paċi u aktar u aktar, għax hekk qed jikkmanda ħaddiehor, l-UE u l-IMF.

Imma anke jekk il-poplu Grieg finalment ikollu jaċċetta u jkollu jagħmel is-sagrifiċċji, il-ġudizzju personali tiegħi hu li l-ekonomija Griega se taqa’ f’riċessjoni kbira.

Il-konsegwenza ta’ dan hija li allura mhux se tkun biżżejjed biex tgħin jinġabru t-taxxi biex jirnexxielha toħroġ minn din il-kriżi. Tali ġudizzju huwa rifless ukoll fil-mod li bih qegħdin jaġixxu s-swieq finanzjarji u r-‘rating agencies’. Ma tlumhomx. Aktar u aktar meta jkollhom xamma li flushom mhux se joħduhom lura.

It-tieni punt. Kellu jittieħed daqstant żmien biex l-istituzzjonijiet tal-Unjoni Ewropea, bħalma huma l-Kunsill tal-Ministri, il-Bank Ċentrali Ewropew u l-Kummissjoni nnifisha, jaslu fi ftehim dwar kif u b’kemm għandha tkun mgħejjuna l-Greċja?

Wieħed għandu jżomm f’moħħu li l-aktar li se tikkontribwixxi għal dan il-pakkett t’għajnuna hija l-Ġermanja. Ma rridux ninsew lanqas li mat-twaqqif tal-ewro, l-pajjiżi taż-Żona Ewro kellhom jieqfu milli jkollhom il-munita tagħhom. Hekk għamlet il-Ġermanja. “Tilfet” il-Mark Ġermaniż, munita li kienet fost l-aktar b’saħħithom. Minn dakinhar deher ix-xettiċiżmu Ġermaniż dwar kemm kienu se jkunu fl-istess livelli wħud mill-pajjiżi li riedu jidħlu u daħlu, fiż-Żona Ewro. Il-Ġermaniżi kienu xettiċi għax diversi huma dawk il-pajjiżi Mediterranji li daħlu fiż-Żona Ewro u komplew bl-istess stil ta’ ħajja, fejn jonfqu aktar milli jdaħħlu. Meta dawn il-pajjiżi kienu għal rashom kienu jbenġlu s-sitwazzjoni billi jiżva lutaw il-munita tagħhom, joħolqu ftit inflazzjoni u jmexxu.

Il-Ġermaniżi kienu xettiċi kemm pajjiżi bħal dawn kienu se jkunu kapaċi jiddixxiplinaw lilhom infushom u jżommu l-inflazzjoni baxxa. Twaqqaf il-Patt ta’ Stabilità u Tkabbir li kien immirat li jagħmel dan permezz ta’ miri fir-rigward tad-dejn u tad-defiċits. Però nafu li dan kien dgħajjef fil-konfront ta’ min mar ’l hinn mill-miri.

Imma issa s-sitwazzjoni hi li hi. Membru tal-familja, taż-Żona Ewro, jinsab fl-inkwiet. X’tagħmel? Tħallih jegħreq? Tħalli l-“marda” tinfirex f’pajjiżi membri oħrajn, bħal Spanja, l-Portugall, l-Italja, l-Ingilterra, l-Irlanda? Le, imma lanqas kellu jfisser li qisu ma ġara xejn. Int tiddejjen u jien inħallas.

Kien għalhekk li l-Ġermanja, meqjus il-fatt li se tkun hi li toħroġ l-aktar għall-pakkett ta’ għajnuna, insistiet li jiddaħlu miżuri ta’ awsterità fil-Greċja. Għax jekk le, mhux biss jintilfu l-flus, imma tisfaxxa ż-Żona Ewro. Din hi l-akbar sfida li qatt rat iż-Żona Ewro sa mit-twaqqif tagħha.

It-tielet punt. It-Trattat ta’ Lisbona. Trattat li nafu kemm dam ma twieled. Trattat, li għax kien jaħseb li setgħet tinqala’ sitwazzjoni bħal din, ħaseb għal deterrent. Jispeċifika li huwa projbit li pajjiż membru tal-Unjoni Ewropea, jew l-Unjoni Ewropea, jgħinu pajjiż li jaqa’ fi kriżi. It-Trattat ta’ Lisbona ma riedx li jkun hemm xi forma ta’ garanzija awtomatika u li b’hekk toħloq periklu morali, dak li l-Inglizi jsejħulu ‘moral hazard’.

Imma issa l-ħaġa saret. Il-konsegwenza hija li t-Trattat ta’ Lisbona jrid jiġi revedut. Fil-fatt l-UE dal waqt issejjaħ Konferenza Intergovernattiva biex fost l-oħrajn tara kif ’il quddiem din il-kriżi tal-lum tiġi evitata u jekk meta tinqala’ jkun hemm istituzzjonijiet u proċeduri f’posthom biex tissolva ruħha mingħajr biża’ li tgħerreq magħha liż-Żona Ewro.

Dan se jwassal għal mod ġdid kif iż-Żona Ewro trid tmexxi lilha nnifisha. Hemm min se jipprova t-triq jew sqaq tal-federaliżmu. Min hu l-aktar pragmatiku jfittex toroq oħrajn.

Żgur però li “l-istorja Griega għadha tibda”.

Il-qgħad fl-UE

Sa Marzu li għadda ċ-ċifra tal-qgħad fil-pajjiżi tal-Unjoni Ewropea kienet tammonta għal aktar minn 23 miljun. F’termini perċentwali dan l-ammont jirrifletti 9.6%, l-istess perċentwali tax-xahar ta’ qabel.

Il-varjazzjoni bejn il-pajjiżi membri bl-inqas nies qiegħda u dawk bl-ogħla persentaġġi hija waħda sostanzjali.

Filwaqt li fl-Olanda u l-Awstrija r-rata tal-qgħad hija 4.1% u 4.9% rispettivament, dawk tal-Latvja u Spanja huma 23.3% u 19.1% rispettivament.

Ikomparat mal-istess żmien is-sena l-oħra, kienet il-Ġermanja biss li rat żidiet fin-numru ta’ nies jaħdmu, bil-Gvern joffri sussidji lill-kumpaniji biex titnaqqas il-ġimgħa tax-xogħol.

Il-qgħad fil-Ġermanja niżel minn 7.4% għal 7.3%. Fuq in-naħa l-oħra, il-Latvja rat żieda ta’ tmien punti perċentwali fir-rata tal-qgħad, minn 14.3% għal 22.3%.

Ir-rata tal-inflazzjoni f’April li għadda kienet ta’ 1.5% ikkomparat ma’ 1.4% ix-xahar ta’ qabel. Sadanittant il-Konfederazzjoni tat-Trejdunjins Ewropej (ETUC) hija nkwetata dwar dak li jikkonċerna l-impjiegi għaż-żgħażagħ.

L-ETUC qiegħda tinsisti li l-impjiegi għaż-żgħażagħ għandhom ikunu fin-naħa ta’ fuq tal-prijoritajiet f’kull pjan li jista’ jsir biex tkun irkuprata s-sitwazzjoni fil-pajjiżi tal-UE.

Sodisfazzjon ieħor

Bhal-lum ġimgħa semmejt l-artiklu tiegħi “Sodisfazzjon”. Semmejtu hekk għax kien hemm pass fid-direzzjoni t-tajba wara li l-Enemalta ddeċidiet li ma taqtax id-dawl ta’ wħud mill-familji vulnerabbli li ma jkunux jistgħu jħallsu l-kontijiet tad-dawl u tal-ilma.

Nhar il-Ġimgħa tal-ġimgħa l-oħra kelli “Sodisfazzjon” ieħor. Kont mistieden “niddibatti” ma’ studenti minn diversi skejjel Maltin f’dibattitu Parlamentari fil-Kamra tad-Deputati fl-okkażjoni ta’ Jum l-Ewropa. Fuq “in-naħa tiegħi” kien hemm ukoll Deputati kemm tal-Gvern kif ukoll tal-Oppożizzjoni. It-tema tad-dibattitu mal-istudenti kienet “Is-Sena 2010 – Is-sena Ewropea għall-ġlieda kontra l-faqar u l-esklużjoni soċjali”.

Nistqarr li l-argumenti li ppreżentaw is-sitt studenti parteċipanti kienu argumenti studjati u riċerkati sewwa. Argumenti li jnisslu fik fiduċja u sodisfazzjon għal kontributi bħal dawk li smajna.

Prosit!

Sodisfazzjon

2010-05-17T21:35:00.000+02:00

www.l-orizzont.com - It-Tnejn, 3 ta' Mejju, 2010

RAPPORT imxandar fil-ġurnal KullĦadd tal-Ħadd, 25 ta’ April, 2010, intitolat “Mhumiex se jispiċċaw bid-dawl maqtugħ” kien għalija bħal żiffa ħelwa f’ġurnata sħuna tas-sajf Malti. Rapport li nissilli sodisfazzjon, anke jekk dan jista’ jkun akbar.

Sodisfazzjon għax jirrifletti ċaqliq, anke jekk żgħir, favur dawk il-familji vulnerabbli li kienu fil-periklu li jistgħu jispiċċaw mingħajr provvista tal-elettriku għax ma jkunux ħallsu kontijiet pendenti li għandhom mal-Korporazzjoni EneMalta.

Sodisfazzjon għax dawn il-familji huma parti minn dik il-kategorija tal-poplu li fuqha bbażajt Mistoqsija Parlamentari f’Marzu li għadda lill-Kummissjoni Ewropea għax jien tal-fehma li dak li kien qed isir fil-konfront ta’ din il-kategorija ta’ familji jmur kontra Direttiva specifika tal-Unjoni Ewropea, li tipprojbixxi eżattament dan.

Skont ma ħabbar il-ġurnal KullHadd dawk il-pensjonanti li għandhom minn 65 sena ’l fuq mhumiex se jispiċċaw bis-servizz tal-elettriku maqtugħ jekk jaqgħu lura fil-ħlas tal-kontijiet tad-dawl u l-ilma. Barra dan, minn issa ’l quddiem, is-servizz tal-elettriku mhuwiex se jinqata’ f’każ li l-arretrati tal-kontijiet tad-dawl u l-ilma ma jkunux jeċċedu s-somma ta’ €1,000.

Il-qtugħ tas-servizz tal-elettriku, speċjalment lil familji vulnerabbli, familji li jkunu jiddependu għall-għixien tagħhom primarjament mill-benefiċċji soċjali, hija miżura ħarxa u kundannabbli għall-aħħar.

U biex ikompli jitwaddab il-melħ fuq il-ferita, il-qtugħ tas-servizz tal-elettriku jġorr miegħu ħlas ta’ €70 u trid tħallas €70 oħra biex terġa’ tingħata s-servizz.

Tista’ timmaġina xi jfissru €140 għal familja li ma kellhiex dawn il-flus disponibbli għaliha biex taqta’ parti mill-kontijiet pendenti li għandha mal-Korporazzjoni Enemalta.

Matul l-ewwel għaxar xhur tas-sena li għaddiet, u allura qabel ma ddaħħlu t-tariffi l-ġodda tad-dawl u l-ilma, il-Korporazzjoni Enemalta qatgħet is-servizz tad-dawl lil 2,148 familja u lil 459 negozju għax waqgħu lura fil-ħlasijiet tal-kontijiet tagħhom.

Huwa fatt innegabbli li l-pensjonant qed iħoss ħafna dan il-piż. Qed jiżdied in-numru ta’ pensjonanti li qed jispiċċaw “bil-pitazz tad-dejn” u jħallsu ammont kull xahar. Qiegħdin joħduna lura għall-ħamsinijiet meta ħafna familji kien ikollhom “il-pitazz tad-dejn” ma’ tal-merċa.

Din is-sitwazzjoni hija konfermata b’mod uffiċjali. Skont statistika provduta fil-Parlament mill-Ministru tal-Finanzi Tonio Fenech matul is-sena li għaddiet kien hemm 382 pensjonant ta’ ’l fuq minn 61 sena li daħlu fi ftehim ma’ ARMS Ltd biex iħallsu kontijiet tad-dawl u l-ilma li għandhom pendenti. Ma’ dawn kien hemm 2,727 residenzi oħrajn li daħlu fi ftehim simili.

Iċ-ċifri għall-ewwel tliet xhur u nofs ta’ din is-sena ma tantx jawguraw li s-sitwazzjoni se titjieb. Anzi jindikaw li s-sitwazzjoni se teħżien, għax issa se jkunu qegħdin jitħaddmu t-tariffi l-ġodda, li huma ferm ogħla minn tas-sena l-oħra. Fil-fatt s’issa, f’inqas minn erba’ xhur, diġa’ kien hemm 395 pensjonant li daħlu fi ftehim bħal dan u kien hemm 1,774 residenzi oħrajn.

Huwa minnu li dejjem aħjar milli jispiċċaw mingħajr servizz elettriku. Imma jibqa’ l-fatt li kull erba’ ġimgħat, il-pensjonant irid iwarrab parti mill-pensjoni, parti li tista’ tkun sostanzjali biex ikun assigurat li f’daru jkollu bozza tixgħel, ‘fridge’ fejn iżomm ikel u ħalib, magna tal-ħasil u biex jara ftit televiżjoni.

Ċertament li dan mhux lussu anzi neċessita`.

Role of the opposition

2010-05-17T21:34:00.002+02:00

The Times - Tuesday, 20th April 2010

I do not think it is a good sign of our maturity as a nation state that the chances of success at the polls are pinned on one side by the hopes of a significant project such as Mater Dei or the new parliament opening on the eve of the elections, nor on the other side by the hopes that the economy is brought to its knees close to bankruptcy where the suffering of the population is unbearable. It is true that both scenarios do move the core supporters into an emotional frenzy, such that the political parties manage to recruit eager helpers easily in the campaign and ready to man the barricades.

But a close observation of the new upcoming electorate finds that this is not what they want or wish for. They want a government that manages wisely, looks at the long-term benefit of the social and economic fabric of our country and succeeds fairly well for the benefit of our families including their children. On the other hand, they want an opposition which is observant, highly critical of public policy, able to debate intelligently and that shows civility and co-operation when issues of national concern demand unity. Most importantly, it should show enough knowledge on social, economic and environmental issues so it will be looked at as the natural alternative to steer the political helm when the elect-orate so desires.

It does not help the current debate about the role of government and opposition that various labels are being mischievously pinned on both party leaders from each opposing side.

With respect to Lawrence Gonzi as leader of the party in government, I do not think, as some of his critics might like to portray, that the PM is uncaring or that he is not ready to listen or is not approachable.

As a person in politics from the other side of this artificial divide, I would like to think that the government is doing all it can to get to grips with the economic situation, wants to get as much foreign investment as it can lay its hands on and would like Malta to excel.

Of course the opposition's gut feeling is that this government is failing miserably and that many a time there was a better way of going about it rather than the approach taken. It would be unnatural if an opposing party were not to have this feeling. Like any co-pilot, an opposition's fingers are raring to get a grip on the wheel. What is important is that it gives all the necessary assurances that it is not prepared to upset the balance of the plane in flight.

So what should the opposition wish for? I think it should wish that the economy really recovers. It should show that it understands the present situation well, why we are in it, and how we can get out of it. It is up to the government to come forward with the proposals, plans and draft solutions. It is the opposition's role to assess them, give a rigorous critical analysis of them and propose alternatives. The role of the opposition is to oppose, propose and, subject to results at the ballot box, depose. It should demonstrate its ability and knowledge just like a knowledgeable and experienced co-pilot sitting by the side of the captain who is ready to take over without hassles or tussles. The passengers could then put their mind at rest that both pilot and co-pilot know what they are doing, and that any hand-over will indeed be smooth.

The party in opposition must win the next election with conviction, not because the economy is in the worst possible state. As in a relay race, a sprinter should start running well before his team player passes the baton. At this point the opposition should, as in fact it is doing, continue to listen attentively to both experts and laymen alike and show a thorough knowledge of the policy issues. As the time gets nearer its plans must be more fully fleshed out.

Having come to know Joseph Muscat from close quarters, I am more than convinced he harbours no wish of putting any obstacles to the country's development, or that he lets himself fall into a continuous mood of negativity as to Malta's outlook, no matter how dark it might be at the moment. As for the claim that he lacks suggested solutions, my personal opinion is that he has often gone quite far in giving detailed recipes for a way forward. It is his obligation and duty, however, to constantly put forward reasoned criticism of government programmes and attack any misguided economic policy.

The electorate needs a new administration ready to hit the ground running - I think Dr.Muscat's team will be ready to do so.

It-tmiem jew il-bidu ta’ ugigħ ir-ras?

2010-05-17T21:34:00.001+02:00

www.l-orizzont.com - Il-Ġimgħa, 16 ta' April, 2010

Bil-Greċja fi kriżi finanzjarja kbira li ggravat minn jum għall-ieħor u li magħha bdiet tiġbed liż-Żona Ewro kollha filwaqt li tħalli impatt fuq il-munita ewro nnifisha, is-“sejbien ta’ triq” għal għajnuna lill-Greċja tqis minn bosta bħala raġġ ta’ tama.

Anke jekk bħal kull kompromess politiku ieħor il-ftehim li waslu għalih is-16-il pajjiż membru taż-Żona Ewro huwa mimli twissijiet, imperfezzjonijiet u inċertezzi.

Fil-verità, il-ftehim milħuq x’ifisser eżatt għaż-Żona Ewro? Ifisser li l-uġigħ ta’ ras għaż-Żona Ewro għadda? Jew ifisser li dan l-uġigħ ta’ ras għadu kemm beda?

Potenzjalment il-ftehim milħuq jista’ jkun ifisser għajnuna ta’ 30 biljun ewro lill-Greċja bis-sehem tas-16-il pajjiż taż-Żona Ewro u tal-Fond Monetarju Internazzjonali (IMF).

Filwaqt li n-naħa taż-Żona Ewro tikkordina bejnietha self ta’ 20 biljun ewro, allura żewġ terzi tal-pakkett, l-IMF tagħmel tajjeb għat-terz l-ieħor, 10 biljun ewro.

L-involviment tal-IMF fisser nuqqas ta’ qbil bejn l-aktar żewġ pajjiżi influwenti fiż-Żona Ewro, il-Ġermanja u Franza.

Franza, u mhux waħedha, dejjem emmnet u sostniet li ż-Żona Ewro għandha tħares lilha nnifisha mingħajr il-ħtieġa ta’ involviment estranju, bħalma hu l-IMF.

Mhux hekk taħseb il-Ġermanja. L-opinjoni pubblika fil-Ġermanja kienet ċara: m’għandhomx jintużaw fondi Ġermaniżi biex jgħinu lill-Greċja. L-involviment Ġer maniż f’dan il-pjan ta’ għajnuna lill-Greċja jista’ jkun ifisser li l-Kanċillier Angela Merkel ikollha tħallas prezz politiku talli marret kontra l-opinjoni pubblika.

Frankament ma naħsibx li dan il-ftehim ifisser li l-Greċja nħarġet mill-problema. Hemm differenza bejn li toħroġ lil xi ħadd minn problema u li tistabbilixxi għodda li permezz tagħha tipprovdi għajnuna finanzjarja temporanja.

Fil-verità l-partijiet kollha – il-President Van Rompuy; il-Prim Ministru Grieg George Papandreou; il-President Franċiż Nikolas Sarkozy u l-Kanċillier Ġermaniża Angela Merkel – kienu ddikjaraw li ma jixtiequx li din l-għodda tintuża.

Anzi. Jemmnu li l-fatt li jkun magħruf li hemm min hu lest jieqaf mal-Greċja għandu minnu nnifsu jservi biex tonqos l-ispiża fuq is-self mill-Greċja.

Fi kliem ieħor dan mhux ftehim li joħroġ lill-Greċja mill-problema, imma huwa forma ta’ garanzija lis-swieq finanzjarji li ż-Żona Ewro mhix se tabbanduna lil xi pajjiż membru tagħha.

Huwa wkoll sforz biex tkun stabbilizzata l-munita ewro, li f’dawn l-aħħar tliet xhur waqgħet b’madwar 7% meta pparagunata mad-Dollaru Amerikan.

Ħadd m’għandu jinsa li l-problema Griega mhix biss ir-riżultat ta’ kriżi fiskali, imma wkoll riżultat ta’ kriżi ta’ kompetittività. Id-defiċit fil-baġit tal-Greċja huwa ta’ 13% li miegħu hemm żieda ta’ 35% fl-ispiża ta’ produzzjoni jekk ipparagunat mal-Ġermanja u 60% jekk ipparagunat mal-Istati Uniti f’dawn l-aħħar għaxar snin. Biex il-finanzi Griegi jkunu sostenibbli jridu jkunu kkoreġuti dawn iż-żewġ punti.

Fil-verità l-Gvern Grieg irid ikompli bil-progress tiegħu li jikkorreġi d-defiċit. Irid jilħaq il-mira tiegħu li għal din is-sena d-defiċit ikun qatgħu bi 3% flimkien ma’ implimentazzjoni ta’ riformi biex itejjeb il-flessibiltà tas-swieq tax-xogħol u t-tiġ did.

Jekk il-Greċja mhux se tkun f’pożizzjoni li tikkonvinċi lis-swieq finanzjarji li qiegħda taġixxi b’serjetà, allura l-wegħdi ta’ self u garanziji miż-Żona Ewro u l-IMF mhux se jkunu jiswew il-karta li nkitbu fuqhom, bil-pożizzjoni tal-Greċja fiż-Żona Ewro tibqa’ waħda fraġġli.

Sadanittant il-premium fuq is-sogru jinqasam bejn il-pajjiżi membri taż-Żona Ew ro.

Madankollu jkun żbaljat jekk il-problemi taż-Żona Ewro jitpoġġew wara bieb il-Greċja. L-istat sfortunat li tinsab fih il-Greċja huwa sintomu ta’ mard akbar fl-ekonomija Ewropea fejn żbilanċi kbar fil-politika fiskali u l-kompetittività ħolqu żewġ klassijiet ta’ pajjiżi fiż-Żona Ewro.

Għandek il-grupp tal-pajjiżi dixxiplinati fejn tidħol politika fiskali, bħalma hija l-Ġermanja u l-pajjiżi Nordiċi u għandek il-grupp tal-pajjiżi, bħal Spanja, il-Portugall, l-Italja u l-Greċja fejn tali dixxiplina hija ferm laxka. Fil-jiem li għaddew dak li jissejjaħ ‘credit rating’ tal-Portugall tniżżel minn AA għal AA-, filwaqt li huwa vulnerabbli wkoll dak ta’ Spanja.

Din il-qasma wasslet biex fl-aħħar summit tal-Mexxejja tal-pajjiżi membri tal-Unjoni Ewropea, il-President Franċiż u l-Kanċillier Ġermaniża jitolbu għall-governanza ekonomika ġdida fl-Ewropa.

Dan id-dibattitu joħloq qasma politika oħra. Waqt li l-Ġermaniżi jħarsu lejn governanza ekonomika bħala mezz biex ikun hemm sorveljanza aħjar fuq l-ekonomiji ta’ pajjiżi bħalma hija l-Ġreċja, li ma kellhiex aġenzija tal-istatistika indipendenti, għall- President Frranċiż u oħrajn dan il-kunċett ifisser xi ħaġa aktar politika.

Skont id-diskussjonijiet li qed ikollna fil-Parlament Ewropew jidher li d-dettalji dwar kif irid jitħaddem il-pjan finanzjarju tal-Unjoni Ewropea għall-Greċja għad iridu jkunu maqbula, waqt li d-dibattitu dwar il-governanza ekonomika tal-Unjoni Ekonomika għadu kemm kemm beda.

Greece: The eurozone headache

2010-05-17T21:33:00.001+02:00

The Times - Thursday, 8th April 2010

After many weeks of confusion and political wrangling, the 16 eurozone countries have finally reached a deal on how to help debt-laden Greece. Like most political compromises, it is an agreement filled with caveats, imperfections and uncertainty.

The fine details of the deal remain unclear but the substance is a financing plan potentially worth €30 billion. It would consist of the 16 eurozone nations granting coordinated bilateral loans worth up to €20 billion, counting for two-thirds of the money, with the International Monetary Fund (IMF) providing the rest.

The involvement of the IMF is widely being seen as a defeat for the French government and others who believe that the eurozone should be able to look after their own. However, it was one of the preconditions for the German government agreeing to the deal. Public opinion in Germany is strongly opposed to using German funds to assist Greece and Chancellor Angela Merkel may still pay a political price for agreeing to any deal that could involve German money.

I do not think this new agreement constitutes a bailout. It is one thing to implement a bailout and quite a different thing to establish an instrument to provide temporary financial assistance. Indeed, all sides - President Herman Van Rompuy, Greek Prime Minister George Papandreou, French President Nicolas Sarkozy and Ms Merkel - have stated that they do not want this financial safety net to ever be used.

Instead, they believe that the existence of the plan should bring down Greece's borrowing costs. In other words, this agreement is not a bail-out but a guarantee to financial markets that the eurozone will not abandon one of its members. It is also an attempt to stabilise the euro, which has fallen by about seven per cent against the US dollar in the last three months.

While there has been a great deal of public confusion amid fevered talk of bailouts we should not forget that Greece's problems are not just the result of a fiscal crisis but also a competitiveness crisis. Its budget deficit is running at 13 per cent alongside unit labour costs that have risen by 35 per cent against Germany and 60 per cent against the US in the last 10 years. Both problems must be corrected if Greece's public finances are to become sustainable. Indeed, the Greek government must continue its programme to correct its budget deficit and meet its target to cut the deficit by three per cent this year, alongside reforms to improve the flexibility of its labour markets and innovation. If it cannot convince financial markets that it is serious, then loans and guarantees from the eurozone and the IMF will not be worth the paper they are written on. The position of Greece in the eurozone would remain fragile. In the meantime, the risk premium will now be shared with the eurozone countries where the spreads have already responded.

However, it would be wrong to blame Greece for the problems of the eurozone. Greece's plight is a symptom of a wider ailment in the European economy, where big imbalances in fiscal policy and competitiveness have led to a two-tier eurozone with disciplined members such as Germany and the Nordic countries in one group and the so-called PIGS in the other. Portugal's credit rating has been downgraded from AA to AA- and Spain is also vulnerable.

This divide led to demands at the EU summit, led by Mr Sarkozy and Ms Merkel, for a new "economic government" of Europe, with macro-economic policies more closely directed at EU level. This debate creates another set of political divides. While the Germans see economic governance as a means to introduce better monitoring of economies such as Greece, which had no independent statistical agency, the concept means something more political to the French President and others.

Certainly, it would be misguided to think that this EU summit agreement is the end of the difficulties facing Greece and the eurozone. The fine print of the EU "financing plan" will have to be agreed while the debate about the economic governance (or government) of the EU is one that has only just begun.

Taxxa globali…għad narawha?

2010-05-17T21:31:00.000+02:00

www.l-orizzont.com - L-Erbgħa, 7 ta' April, 2010

Diversi huma l-problemi kbar li qiegħda tħabbat wiċċha magħhom id-dinja. Hemm problemi li ilhom magħna, u huwa għajb li għadhom magħna, bħalma huwa l-faqar fost il-pajjiżi, u hemm problemi li tista’ ssejħilhom riċenti, bħalma huma dawk maħluqin mit-tibdil fil-klima. U hemm problemi li donnhom għandhom ċiklu, li jolqtuna kull tant żmien, bħalma hija l-kriżi finanzjarja, li din id-darba kienet waħda internazzjonali, u li l-effetti severi tagħha varjaw minn pajjiż għal ieħor, skont kemm il-pajjiż kellu riżorsi biex jilqagħlha.

“Pakkett problemi” li sab ruħu fl-iskaluni ta’ fuq nett tal-aġenda internazzjonali, preċiżament quddiem il-grupp magħruf bħala l-G20, li bħala grupp irid jara kif se jilqa’ għal dan kollu, b’mod partikolari biex jissalvagwardja l-ekonomija globali, u allura lill-pajjiżi kollha milquta. Fil-ġimgħat li għaddew bdejna naraw u niddiskutu f’livell ta’ Parlament Ewropew, proposti ta’ salvagwardja. Proposti li finalment bħal kull assiguraz zjoni jfissru finanzjament, u allura kif se jinġabru l-finanzi meħtieġa.

Proposta fuq dawn il-linji hija l-ħolqien ta’ taxxa fuq transazzjonijiet finanzjarji. Issa ilu numru ta’ ġimgħat sew li l-Parlament Ewropew, imlaqqa’ fi Strasbourg, iddibatta u adotta riżoluzzjoni li ressaq il-Kumitat għall-Affarijiet Ekonomiċi u Monetarji (ECON) li tat in-nifs lill-Unjoni Ewropea biex tiftiehem fuq pożizzjoni komuni dwar il-kwistjoni u tinnegozja mal-pajjiżi tal-G20 u mexxejja internazzjonali oħrajn, u biex il-Kummissjoni tħejji studju dwar l-impatt ta’ taxxa globali fuq transazzjonijiet finanzjarji, meqjusin il-vantaġġi u żvantaġġi potenzjali ta’ taxxa bħal din.

Kien il-kompitu tiegħi bħala Viċi-Ċermen tal-ECON li nressaq il-mozzjoni u mmexxi d-dibattitu Parlamentari dwarha. Fakkart kif 40 sena ilu, bħala student, parti mid-diskussjoni dwar l-Ordni Ekonomiku Internazzjonali Ġdid kienet dwar kif, dawk li kienu jissejħu SDRs (Special Drawing Rights), issirilhom xi forma ta’ taxxa fuqhom, imħallsa mill-gvernijiet, biex il-flus minnha jintużaw għall-programmi ta’ żvilupp f’pajjiżi fqar. Huwa fatt magħruf li dan il-ħsieb ma mmaterjalizzax.

Jista’ jkun li llum, b’riżultat tal-globalizzazzjoni, flimkien ma’ avvanzi teknoloġiċi u rieda politika akbar, ċerti pjani huma aktar fattibbli. Fl-istess ħin irid jingħad li żdiedet ukoll sewwa l-kompetittività fost l-għanijiet globali. Għalhekk wieħed irid joqgħod attent.

Hemm dik li tissejjaħ Tobin Tax, li taħseb għall-użu ta’ taxxa żgħira fuq transazzjonijiet finanzjarji, li d-dħul minnha jmur għal għajnuna ta’ żvilupp. F’Set tembru li għadda, fil-laqgħa tal-G20, kien hemm mexxejja politiċi li riedu li s-settur finanzjarju jħallas għal twaqqif ta’ fond ta’ stabilità u jipprovdi kumpens għall-ħsarat ikkawżati mill-kriżi finanzjarji lill-ekonomija dinjija.

Sadattant il-President tal-Unjoni Ewropea, Jose Manuel Barroso, issuġġerixxa l-introduzzjoni ta’ taxxa globali biex tiffinanzja proġetti ambjentali.

Dan kollu jeħodna lura għall-“pakkett problemi” li bdejt bih din il-kitba. Il-mistoq sija naturali hija: nistgħu verament nużaw taxxa waħda biex nilħqu dawn l-għanijiet differenti u f’daqqa?

Bħal kull munita oħra, din il-munita għandha żewġ uċuh. Hemm argumenti sodi favur taxxa fuq transazzjonijiet finanzjarji, u hemm riservi u mistoqsijiet daqstant ieħor sodi dwar kif jistgħu jinġabru l-fondi minn dawn it-taxxi; jekk l-ispiża tal-implimentazzjoni hux se tkun akbar mid-dħul innifsu; u min se jiddeċiedi kif jintużaw il-fondi miġburin.

Huwa eżattament għalhekk li r-riżoluzzjoni tal-ECON titlob għal studju dwar l-impatt minn tali taxxa proposta (li se jsir mill-IMF) biex ikunu jistgħu jitwieġbu numru sostanzjali ta’ mistoqsijiet.

Mistoqsijiet bħal kemm potenzjalment jista’ jkun id-dħul minn taxxa bħal din; x’effett ikollu fuq il-livell tal-prezzijiet; x’kienu l-esper jenzi minn taxxi simili preċedenti fejn jirrigwarda evitar ta’ ħlas ta’ taxxa u ċaqliq ta’ kapital jew servizzi; jekk taxxa tgħinx biex ikunu stabilizzati s-swieq finanzjarji; u, forsi l-aktar punt kruċjali, il-benefiċċji u l-iżvantaġġi li taxxa bħal din tkun stabbilita mill-Unjoni Ewropea waħed ha.

Fl-opinjoni tiegħi biex taxxa bħal din tkun effettiva jrid ikollha l-appoġġ tal-Istati Uniti u mexxejja oħrajn tal-G20 u mhux jekk titħaddem mill-Unjoni Ewropea waħedha.

Nemmen li f’livell ta’ Unjoni Ewropea għandna nevitaw li nadottaw xi ħaġa li tnaqqas il-kompetittività tagħna jew li xxekkel l-investiment, l-innovazzjoni u t-tkabbir ekonomiku. Ninsab imħasseb dwar il-fatt li finalment se jkun il-konsumatur li jkollu jagħmel tajjeb għall-ispiża tal-implimentazzjoni ta’ dak propost.

Jekk ma noqogħdux attenti, kull attentat biex nintaxxaw lill-banek jista’ jkun ifisser xejn iżjed minn taxxa oħra li trid titħallas mill-konsumatur.

Qabel naħsbu biex nikkonsidraw bis-serjetà l-implimentazzjoni ta’ taxxa fuq transazzjonijiet finanzjarji, għandu jkollna tweġibiet għal dawn il-mistoqsijiet kollha. Għandu wkoll ikun deċiż b’mod speċifiku x’se jkun l-għan li għalih jintużaw il-fondi miġburin.

Iffaċċjati minn ħafna għanijiet, għandna nenfasizzaw li kull għan għandu jkun trattat separatament u jagħmel użu minn strument wieħed għalih. Dan huwa prinċipju kardinali li nenfasizzaw fl-ekonomija.

Taxxa globali fuq transazzjonijiet finanzjarji tista’ tirnexxi biss jekk tkun iffokata, fattibbli, u jkollha appoġġ internazzjonali wiesgħa, u mhux jekk tittanta tkun l-affarijiet kollha f’daqqa għal kulħadd f’daqqa.

Can a global tax work?

2010-05-17T21:30:00.000+02:00

The Times - Tuesday, 30th March 2010

An idea that has re-gained prominence as a result of the financial crisis is that of introducing a global tax on financial transactions. Several weeks ago in Strasbourg, the European Parliament debated and adopted a resolution tabled by the Economic and Monetary Affairs committee (Econ) giving the green light for the EU to agree a common position on the issue and negotiate with the G20 and other international leaders, and for the Commission to undertake an impact assessment of a global financial transaction tax looking at both its advantages and potential disadvantages.

Introducing the resolution and leading the parliamentary debate as vice-chairman of Econ, I spoke in plenary, noting that 40 years ago as a student, part of the New International Economic Order which we used to discuss, included a proposal to use special drawing rights (SDRs) loaned to the IMF to include a sort of tax on national governments which would be used for helping poor countries' development programmes. As we know, this did not materialise.

Many years later the effects of globalisation, combined with technological advancement and stronger political will, means that certain plans are now more doable. However, the number of competing global policy objectives has greatly increased. Alongside the original Tobin Tax idea of using a small financial transaction tax for development aid, some political leaders at the G20 summit last September called for the financial sector to pay for the establishment of stability funds and provide recompense for the damage caused by the financial crisis to the world economy. Meanwhile, President Jose Manuel Barroso has suggested the introduction of a global financial levy to fund environmental projects.

So, besides tackling poverty, we are now talking about using a financial transaction tax to combat the effects of climate change and to act as a sort of global insurance premium to compensate victims for the social and economic pain caused by financial crises. Can we really use one tax to achieve all these different aims?

Moreover, while there are many strong advocates of transaction taxes, there are also reservations and questions about how funds from it could be collected, whether revenues would be outweighed by the costs of implementing it, and over who would decide how the money was used.

That is why the Econ resolution called for an impact assessment on a transaction tax (being undertaken by the IMF) to provide answers to a range of questions such as: the revenue potential; how it would affect price levels; what the previous experiences of transaction taxes had shown in terms of tax avoidance or the migration of capital or services; whether a tax could help stabilise financial markets; and, crucially, the benefits and drawbacks of the EU going it alone in establishing a transaction tax.

From my point of view, it goes without saying that a transaction tax can only work effectively if it has support from the US and other world leaders in the G20, not by the EU going it alone. At EU level we should avoid any policy that would reduce our competitiveness or hamper investment, innovation and economic growth. I am also concerned that any extra costs borne by banks and other financial institutions in conducting financial transactions would simply be passed on to the end users.

If we are not careful, an attempt to apply a levy to banks could become yet another tax paid by consumers.

We need answers to all these questions before we can seriously entertain the implementation of a tax on financial transactions. We also need to decide on a specific purpose that the tax revenues would be used for. Faced with multiple policy objectives, we should stick to the wise rule that each objective needs its own separate instrument. A global financial transaction tax can only succeed if it is focused, achievable and commands widespread international support - not if it tries to be all things to all people.

This little piggy...

2010-03-24T22:16:00.001+01:00

The Times - Wednesday, 24th March 2010

So the cat is finally out of the bag. The pain to be suffered by all Maltese firms, families, pensioners and all is but a medicine we need to take to avoid a worse economic outcome such as the one in Greece. The link with oil prices has grown so thin that the main Cabinet protagonists are now explicitly linking the tariffs to the prevention of another Greece in Malta. But why pick on Greece out of the 16 members of the eurozone? What do we have in common? Is a similarity being hinted at, perhaps even subconsciously? Say, as PIG is to Little Piggy? Perhaps.

It was September 2008 when the two main protagonists, known for their down-to-earth common sense, started behaving very oddly. Significantly, they refused in the most absolute manner to consult effectively with the social partners in the Malta Council for Economic and Social Development. The alternatives being offered as solutions were similar to a condemned person's choice of dying by hanging or by a firing squad.

They camouflaged their arguments with complicated arithmetic, a plethora of graphs and stretched economic and accounting principles. This raised eyebrows, of course, but few realised then that these Cabinet protagonists were themselves in a state of shock. They must have had just seen a lot of red ink pouring profusely from our public finances, a couple of months after the general election.

The emergency lever had to be pulled on October 1, 2008 and nothing and nobody could reverse this measure caused by a force majeure. It even had to be backdated.

Under the semblance of business as usual and token selective assistance given to big firms in apparent trouble, the fiscal consolidation during one of the biggest international recessions since the 1930s had to continue. The "hidden tax" model was repeatedly applied to tariffs of electricity, water, gas and, recently, drainage services.

Indeed, Malta has many things in common with Greece apart from the Mediterranean Sea. For the past 20 years Malta managed to gross up its debt from a mere 12 per cent in 1986 to more than 70 per cent some 20 years later. To accomplish such a feat, our government had to increase current expenditure each year by a higher rate of growth than the country's nominal GDP. Even the two-digit economic growth rate of the late 1980s and early 1990s were superseded by an expenditure outburst that knew no bounds. The mentality that money was "no problem" was ingrained and accepted by many. Millions of euros were wasted on ineffective programmes and initiatives, misguided subsidies, rent seeking public authorities and agencies lacking transparency and accountability. All this exuberant public expenditure was swept out of sight under the public debt carpet.

Ok, the past is the past. So what about the future? Is there, then, anything inherently wrong with the current economic measures? Yes, absolutely. They are misguided.

Just observe the fiscal consolidation carried out by the government in part fulfilment of European membership and subsequently eurozone entry. It was mainly carried out against the best advice through significant increases in the tax burden that depressed our economy between 2001 and 2006 causing a two-year recession and accompanying sluggish growth pre- and post-recession years. The year 2007 being a euro changeover year contributed to a stoking of an existing property bubble and a consumption-led frenzy, which tricked the government into believing that the economy had then turned a corner and jumped on a sustainable growth path.

It is foolish for the government now to repeat the process once again through a concealed fiscal consolidation based on increasing the tax burden and cuts in capital expenditure. Both the International Monetary Fund and, recently, the National Bureau of Economic Research in the US are advising countries against this easy but unsustainable consolidation path. The inflationary effect of the tariff charges will further contribute to Malta's already eroded export price competitiveness while the reduction in public investment will condemn the economy to sluggish growth for many years to come. We just cannot afford to go along this path again, this time with our eyes wide shut.

Malta u l-Greċja: hemm xi xebh?

2010-03-24T22:13:00.001+01:00

www.l-orizzont.com - Il-Ħamis 18 ta' Marzu 2010

Li l-poplu qiegħed ibati u se jbati aktar malli jibda jirċievi l-kontijiet tad-dawl u l-ilma bit-tariffi l-ġodda, m’hemm ebda dubju dwaru. Dan jammettieh il-Gvern stess. Tant li qed jittanta jilgħab karta wara l-oħra fi sforz li jbenġel kif jista’ s-sitwazzjoni filwaqt li jaħbi ħtijietu.

Lagħab il-karta li ż-żieda esorbitanti fit-tariffi tad-dawl u l-ilma kienet marbuta mal-prezz taż-żejt. Malli l-Gvern irrealizza li din l-iskuża mhix kredibbli mal-poplu, lagħab it-tieni karta. Qiegħed jgħidilna li dawn it-tariffi aktar huma miżura preventiva milli ħaġ’oħra, biex issalvana milli ngħaddu minn dak li għaddejja minnu l-Greċja bħalissa.

Imma għaliex iggranfaw mal-Greċja mill-pajjiżi l-oħrajn kollha fiż-Żona Ewro? X’għandu komuni pajjiżna mal-Greċja? Forsi qiegħed ikun indikat baxx baxx li hemm xebħ bejn Malta u l-Greċja?

Mhux xi ħaġa li ġrat lbie-raħ. Nistgħu mmorru lura mill-inqas lejn Settembru tas-sena 2008. Kien hemm li beda jberraq sew. B’mod li bellaħ lis-sieħba soċjali fl-MCESD, il-Gvern kien irrifjuta, u dan b’mod assolut, li jikkonsulta magħhom b’mod ta’ veru fuq kwistjonijiet li huma ta’ inte-ress nazzjonali. L-alternattivi li bdew ikunu offruti bħala soluzzjoni kienu kollha jwasslu lejn l-istess destinazzjoni, imma b’mod differenti. Bħal donnok tagħti għażla lil persuna kkundannata għall-mewt tridx tmut bit-tgħalliq jew b’tiri ta’ azzarin!

Fir-rapport fuq it-tariffi l-Gvern inħeba wara ħafna grafika u aritmetika kkumplikata flimkien ma’ tiġbid ta’ prinċipji ekonomiċi. Dan qajjem tħassib, imma dakinhar ftit irrealizzaw li l-Gvern innifsu kien fi stat ta’ xokk. Kienu għaddew biss ftit xhur minn wara l-Elezzjoni Ġenerali tas-sena 2008 u l-Gvern kien sar konxju mill-emoroġija finanzjarja.

Il-miżura ta’ emerġenza kellha tittieħed f’Ottubru 2008. Kien enfasizzat li xejn u ħadd ma seta’ jreġġa’ lura tali miżura kkawżata, skont il-Gvern, minn forza maġġuri. Mhux talli hekk, talli kellha tkun miżura retroattiva.

Fl-istess ħin riedu li tingħata l-impressjoni li kollox miexi b’mod normali, li l-Gvern ma kienx dahru mal-ħajt. Anzi kellu r-riżorsi finanzjarji adegwati biex iwettaq pakkett ta’ stimolu ekonomiku effikaċi. Fil-fatt bdew jingħażlu kumpaniji kbar biex ikunu mgħejjunin finanzjarjament joħorġu mill-inkwiet.

Però fi żmien meta d-dinja kienet għaddejja minn waħda mill-agħar riċessjonijiet mis-Snin 30 ’il hawn, il-politika fiskali tal-Gvern Malti fir-realtà kienet li tkompli tissikka, mhux tespandi kif suppost kellu jsir fi żmien diffiċli bħal dan. Dan qalitu wkoll l-Kummissjoni Ewropea u mhux jien biss. Intuża repetutament metodu ġdid ta’ tassazzjoni moħbija, billi d-dħul ġdid ġie maskerat fit-ta-riffi tad-dawl, l-ilma, il-gass u riċentement f’taxxa fuq id-drenaġġ.

Kemm huwa veru li Malta u l-Greċja għandhom ferm aktar affarijiet komuni bejniethom, milli sempliċiment li huma żewġ pajjiżi Mediterranji? Ħalli naraw.

Jekk hemm xi ħaġa li tissupera fil-kwistjoni tal-Greċja huwa d-dejn. U Malta? Id-dejn ta’ pajjiżna tul dawn l-aħħar 20 sena sploda minn 12 fil-mija tal-Prodott Gross Domestiku (PGD) kif kien fl-1986 għal aktar minn 70 fil-mija tal-PGD ftit snin ilu. Biex irriżulta dan kollu l-Gvern żied in-nefqa rikorrenti tiegħu ta’ kull sena b’rata ferm ogħla minn dik li biha kien qed jikber il-kejk nazzjonali, jiġifieri l-PGD. Anke jekk it-tkabbir ekonomiku lejn l-aħħar tas-Snin 80 u l-bidu tas-Snin 90 kien taj-jeb ħafna, l-infiq kien ferm akbar. In-nefqa pubblika ma kinietx taf b’limiti.

Sadattant laħqet iddaħħlet sewwa f’pajjiżna mentalità li l-flus mhux problema. Xi ħaġa li kienet tbellgħet u twemmnet minn bosta. Miljuni kbar ta’ ewro kienu litteralment moħlijin fi programmi u inizzjattivi li ma rrendewx dak mistenni minnhom. Ma’ dan hemm sussidji żgwidati u nuqqas ta’ trasparenza u kontabilità min-naħa ta’ awtoritajiet u aġenziji pubbliċi. Dan kollu, u allura parti sewwa min-nefqa pubbika esorbitanti, inħeba taħt it-tapit permezz tas-self.

Wieħed jista’ jgħid iżda, li l-passat huwa passat, u kif jgħid il-qawl: għall-passat m’hemmx kunsill. Imma għall-futur? Hemm xi tama? Il-miżuri ekonomiċi li qed jieħu l-Gvern huma għall-inqas tajbin? Jiddispjaċini nistqarr li ma naqbel xejn mal-politika ekonomika li qed imexxi l-Gvern. Skont li tgħallimt u dak li qed isaħħu fonti ta’ esperti tal-Fond Monetarju Internazzjonali (IMF) dak li qed jagħmel il-Gvern qed iwassal biex il-problemi jibqgħu magħna avolja qed ifissru tbatija kbira għal bosta familji.

Biżżejjed tħares lejn kif tmexxew il-finanzi pubbliċi tagħna fi żmien ta’ preparazzjoni biex isseħħ is-sħubija fl-Unjoni Ewropea u susseġwentement id-dħul fiż-Żona Ewro. Dakinhar tmexxiet l-istess politika fiskali li qegħdin tiġi applikata llum.

Dan sar, primarjament, permezz ta’ żieda qawwija fil-piż tat-taxxi, tant li ksirna r-rekord fl-Unjoni Ewropea għal dawn iż-żidied, miżura li kkawzat riċessjoni għal sen-tejn, sentejn li kienu “kumplimentati” bi tkabbir ekonomiku kajman, kemm qabel, kif ukoll wara, dan il-perjodu ta’ riċessjoni.

Is-sena 2007, partikolarment rat il-Maltin iħabblu moħ ħhom kif jeħilsu mil-Lira Maltija moħbija billi jonfquha. Dan għen qatigħ biex tkompli tintefaħ il-bużżieqa fis-settur tal-proprjetà u żieda qawwija fil-konsum.

Din is-sitwazzjoni qarrqet anke bil-Gvern innifsu, tant li beda jemmen li l-ekonomija kienet tinsab lura fit-triq it-tajba, bi tkabbir sostenibbli.

Jidher li l-Gvern ma tgħallimx il-lezzjoni li l-konsolidazzjoni fiskali permezz ta’ żidied fil-piz tat-taxxa u tnaq qis fl-ispiza kapitali ma tgħinx wisq biex toħroġ l-ekonomija mir-riċessjoni u twassal għat-tkabbir ekonomku sodisfaċenti.

Tkun stupidaġni li għal darb’oħra l-Gvern jirrepeti l-proċess ta’ konsolidà fiskali bbażat f’żieda fil-piż tat-taxxi u tnaqqis fin-nefqa kapitali.

L-effett inflazzjonarju li se jikkawżaw it-tariffi l-ġodda se jwassal biex inkomplu nkunu inqas kompetittivi fl-esportazzjoni tal-manifattura u t-turiżmu.

Fl-istess ħin it-tnaqqis fl-investiment pubbliku jkun ifisser tkabbir ekonomiku kajman għal numru ta’ snin.

Ma nifilhux nerġgħu nimxu l-istess triq meta nafu diġà fejn se twassal.

It-tifsira politika fil-kriżi taż-Żona Ewro

2010-03-24T22:08:00.000+01:00

www.l-orizzont.com - It-Tnejn 8 ta' Marzu 2010

Il-problemi enormi li għaddejjin minnhom il-Greċja jistgħu ma jibqgħux “problemi Griegi” biss. Jistgħu jinfirxu lejn pajjiżi oħrajn. Hu għalhekk li l-Greċja u Brussels qegħdin jaraw flimkien, kif permezz taż-Żona Ewro, jistgħu jikkontrollaw is-sitwazzjoni, bil-Gvern Grieg jintroduċi miżuri ta’ awsterità, miżuri li wasslu għal protesti kbar fit-toroq. Biex il-borma tkompli tagħqad, l-aġenzija tar-ratings Standard and Poor’s, stqarret li l-credit rating tal-Greċja jista’ jitniżżel għal BBB-, skaluna biss ’il fuq mill-fondoq. Fi ftit kliem, sitwazzjoni li f’termini ekonomiċi u politiċi tista’ ssejħilha biss tempesta.

F’sitwazzjoni bħal din x’inhuma l-għażliet li għandhom l-Greċja u ż-Żona Ewro?

L-ewwel għażla hi li jkunu l-pajjiżi taż-Żona Ewro li joħorġu lill-Greċja mill-kriżi. Sa ftit ilu, f’laqgħa għolja tal-UE, il-mexxejja tal-Unjoni Ewropea, flimkien mal-President Barroso u l-President tal-Bank Ċentrali Ewropew, Trichet, dehru li kienu resqin lejn soluzzjoni bħal din. Sakemm l-aktar żewġ pajjiżi sinjuri fiż-Żona Ewro, il-Ġermanja u Franza, urew ċerta kawtela, bil-mexxejja tagħhom it-tnejn jistqarru li kien intbagħat “sinjal politiku ċar ħafna”, kawtela li kompliet tiġi elaborata mill-Kanċillier Ġermaniż meta qalet li “l-Greċja mhix se titħalla waħedha, imma hemm ir-regoli u dawn iridu jkunu segwiti”. Kliem li wassal għal aktar konfużjoni u aktar spekulazzjoni fis-swieq.

Fil-verità, soluzzjoni provduta miż-Żona Ewro, ovvjament soluzzjoni finanzjarja, tqajjem ħafna mistoqsijiet. X’forma ta’ għajnuna finanzjarja? Forma ta’ kreditu? Forma ta’ garanzija fuq is-self? U l-finanzjament għal dan mnejn se jiġi? Kemm se jipprovdi mit-taxxi tiegħu ċ-ċittadin Ewropew? Mistoqsijiet li mill-ewwel juru li fihom infushom diġà jfissru ostakoli politiċi kbar.

Problema oħra li tista’ titqajjem titratta l-legalità jew le ta’ soluzzjoni miż-Żona Ewro. Punt li kien enfasizzat ħafna mill-President Van Rompuy f’laqgħa li kellu magħna l-MEPs membri tal-Grupp Soċjalista u Demokratiku fi Brussels nhar l-Erbgħa, 3 ta’ Marzu, 2010.

It-Trattat ta’ Lisbona (Artiklu 125) jagħmilha ċara li l-Unjoni Ewropea ma tidħolx responsabbli għal obbligi li jkunu daħlu għalihom Gvernijiet tal-pajjiżi membri. Ħafna jirreferu għall-politika bħala l-arti tal-possibbli, imma soluzzjoni għall-Greċja b’dan il-mod tista’ tispiċċa quddiem qorti?

Għażla oħra li tista’ tagħmel il-Greċja hi li tmur għall-wens tal-Fond Monetarju Internazzjonali (IMF). Apparti l-fatt li diġà hemm nuqqas ta’ qbil fi ħdan il-pajjiżi taż-Żona Ewro dwar kemm l-IMF hu f’pożizzjoni aħjar li jsalva lill-Greċja. Imma mhux biss. Kieku l-Greċja kellha tirrikorri għall-wens tal-IMF, tkun ingħatat daqqa qawwija mhux biss liż-Żona Ewro imma wkoll lill-Grecja nnifisha. Tkun ammissjoni ta’ falliment mill-Unjoni Monetarja Ewropea magħdud magħha l-aspett soċjali. Fil-konfront tal-Greċja nnifisha wens mill-IMF ikun ifisser introduzzjoni ta’ miżuri ta’ awsterità aktar iebsin minn dawk li kontrihom qegħdin jipprotestaw fit-toroq eluf kbar ta’ Griegi.

Sadattant bdew ħerġin soluzzjonijiet oħrajn minn ekonomisti u kummentaturi ta’ stoffa. Martin Feldstein, mill-Università ta’ Harvard, issuġġerixxa li l-Greċja għandha titħalla toħroġ miż-Żona Ewro, filwaqt li Charles Goodhart mil-London School of Economics ħareġ bl-idea li kemm il-Greċja kif ukoll il-Portugall jerġgħu joħorġu l-muniti antiki tagħhom, id-drachma u l-escudo rispettivament, flimkien mal-ewro fi sforz biex jilħqu rata ta’ kambju aktar kompetittiva.

Madankollu, minkejja li ż-żewġ proposti, ġejjin minn żewġ ekonomisti ta’ fama kbira, huma ekonomikament sodi, għandhom ħafna problemi politiċi marbutin magħhom. Li titlaq miż-Żona Ewro jkun ta’ imbarazzament nazzjonali qawwi għall-Gvern Grieg, meqjus il-fatt li bħall-Portugall, l-Italja, l-Irlanda, Spanja u anke Malta, il-Greċja kienet iddisprata biex akkost ta’ kollox tidħol fiż-Żona Ewro, tant li kien hemm min qarraq bil-goff u kien hemm min qarraq inqas.

S’issa, il-Greċja għadha ma talbet lil ħadd li joħroġha mill-kriżi. Hemm min fil-Gvern Grieg li jemmen li kieku kellu jsir hekk tkun sfat imminata kompletament l-kredibilità fil-pjani Griegi biex sa tmiem din is-sena d-defiċit jitnaqqas b’4% mit-12.7% li hu bħalissa. Imma l-verità hi li hemm dubji kbar kemm il-Greċja se jirnexxielha timmaterjalizza l-pjan ambizzjuz tagħha.

Aktar minn hekk, waqt li s-swieq finanzjarji jkomplu jippanikjaw u l-Greċja tibqa’ suġġetta għal attakki spekulattivi, ir-riżultat ikun li s-sitwazzjoni tkompli teħżien. Jekk ma jsir xejn u d-destin tal-Greċja jitħalla f’idejn is-swieq finanzjarji spekulattivi dan jista’ jwassal għal falliment li konsegwenzjalment jista’ jħalli effett qawwi fuq il-pajjiżi l-oħrajn tal-Mediterran u partikolarment fuq Spanja u l-Portugall. Biex katastofi bħal din tkun evitata, il-Greċja teħtieġ li tkun appoġġjata b’finanzjament reali u qawwi u mhux biss bil-kliem.

Il-mexxejja politiċi Ewropej għandhom quddiemhom il-kitba fuq il-ħajt: iddeċiedu u aġixxu malajr. Ma’ kull ġurnata li tgħaddi l-pożizzjoni tal-Greċja qegħda teħżien u magħha qegħda tiddgħajjef is-saħħa u r-reputazzjoni tal-munita ewro. Din il-krizi finanzjarja hi l-akbar sfida li ffaċċjat s’issa ż-Żona Ewro.

Il-mistoqsijiet imqanqla minn din il-kriżi huma bosta filwaqt li t-tweġibiet aċċettabbli għalihom huma ftit, jekk mhux xejn.

Not all pain begets gain

2010-02-27T11:43:00.000+01:00

The Times - Saturday, 27th February 2010

We often use the saying that there is no gain without pain, a very useful principle in life, which we discover for ourselves from personal experience and pass on to our children. Economics and, especially, economic policy is replete with examples as well. Businesses have to shave off their prices to sell more products. Industrial sectors have to undertake unpalatable and unpopular restructuring, costing thousands of euros to remain competitive. During a slowdown, firms have to release long-time workers or use wage restraint to survive. Whole economies go through severe austerity programmes in order to become leaner and meaner in a highly-globalised world. For many disciplined countries, like certain self-disciplined persons, this comes naturally and as a matter of fact. Some observers tend to associate such people with a particular religion such as those who abide by the protestant ethic. Others stereotype the Germans or the Chinese as being sterner and less indulgent than, say, the Latino or Mediterranean people. For the latter group, which include the Maltese, we tend to hold the view that discipline has to come from above to have any effect at all: parents, Church authorities, governmental authorities. However, wherever it comes from, within or outside, pain is perceived as a precursor of long-term gain. In the macro economic sphere, especially regarding public finances, the pain economists require to deliver economic stability refers specifically to the need to ensure that political promises can be kept without causing long-term damage and to avoid wasteful expenditure. Essentially, they are the principles of living within one's means: very simple principles but very hard to maintain. Even governments that are self-restrained enough to avoid extravagance find the pressures of the welfare state hard to control. We can say that health, education and social security, including pensions, can become the three nightmares of every Administration. One has to keep an eye on the budgets available, the demographics, the cost of supplying these services and the politics. Self-disciplined governments often find the need to redesign these programmes to make them sustainable. This exercise we refer to as reform or restructuring. Malta today is passing through a very difficult and painful episode of its post-war economic history. No matter how you measure and label this general malaise, calling it absolute poverty, relative poverty or near poverty, the state of affairs is pretty much the same. Many Maltese middle-class families once again fear sliding into the hole most had managed to come out of and would have never dreamt of sliding into again. The Maltese business class has nearly given up all hope of ever winning the losing battle with rising costs and falling revenues, which it has been fighting all throughout this decade. Now many of its members, especially the small ones, are finally deciding to hang up their boots and rush into an early retirement. But all this pain is not the result of structural reform that will reap long-term economic benefits. It has been caused by a decade of economic stagnation; by two prolonged recessions in the space of a decade, by an ever-increasing national tax burden and by a lack of attention to good economic and fiscal management and regulation, especially in the area of utility pricing. Not all pain begets gain. There is so much pain in the world that begets only more pain and suffering. Some of it might have been self-inflicted through past foolish decisions or misjudgments. It is quite dishonest to point to all the economic and social pain suffered to date by the Maltese and say that it has been necessary for our economic well-being. If the government, the Central Bank or the European Commission can convince us that, during these last 12 years, Malta's price competitiveness has improved, that its public expenditures have been kept in check, that Maltese taxpayers are getting more value for money from their taxes and that the health, education, social security and pension programmes are now on a sustainable path, then we can truly state that our pain has been real worth suffering. If not, then the government should grimly admit that it has all been pain without gain.

Prof. Scicluna is a Labour member of the European Parliament.

L-Unjoni Ewropea u d-drittijiet tal-bniedem: Każ tal-“karrotta” u l-“għasluġ”

2010-02-27T11:42:00.000+01:00

www.l-orizzont.com - Il-Ħamis 18 ta' Frar 2010

Il-Parlament Ewropew qatt ma evita li jiddibatti dwar drittijiet umani jew żamm “fommu sieket” għax beża’, jew jibża’, li jista’ jweġġa lil xi ħadd. Id-difiża tad-drittijiet umani hi l-bażi fl-Unjoni Ewropea, maħluqa bi tweġiba għat-Tieni Gwerra Dinjija – biex ikun assigurat li l-popli Ewropej jirrisolvu d-differenzi politiċi tagħhom b’dis kussjonijiet f’kull livell u mhux billi joqtlu lil xulxin fi gwerer. Illum, sittin sena mit-Tieni Gwerra Dinjija, ir-ratifikar tat-Trattat ta’ Lisbona jfisser li l-liġijiet kollha Ewropej iridu jkunu konsistenti mal-libertajiet politici, demokratici u soċjali kif elenkati fiċ-Charter tad-Drittijiet Fundamentali tal-Bniedem. Aktar minn hekk, meta l-Parlament Ewropew jieħu pożizzjoni dwar is-sitwaz zjoni tad-drittijiet politiċi u umani f’xi pajjiż mhux membru tal-UE, il-pajjiż inkwistjoni jagħti widen. Il-Kumitat tal-Affarijiet Barranin tal-Parlament Ew ropew mhux kumitat leġislattiv, imma hu meqjus mill-gruppi politiċi kollha bħala ta’ importanza kbira, bir-riżultat li l-pożizzjoni li jieħu l-Parlament Ewropew tkun dikjarazzjoni ta’ pożizzjoni qawwija. Mezz ieħor li bih jaħdem il-Parlament Ewropew fi kwis tjonijiet ta’ drittijiet umani hu permezz ta’ delegazzjonijiet parlamentari. Hemm aktar minn 30 delegazzjoni li jservu ta’ ħolqa bejn il-Parlament Ewropew u l-pajjiżi mferrxin mad-dinja kollha, li jvarjaw minn Assemblej Parlamentari Konġunti bħal m’huma l-ACP, EUROMED u EUROLAT għal Kumitati Parlamentari Konġunti mwaqqfin b’riżultati ta’ ftehim ta’ assoċjazzjoni għal tkattir ta’ koperazzjoni. Hemm imbagħad ir-rwol ta’ osservaturi, speċjalment waqt l-elezzjonijiet f’xi wħud minn dawn il-pajjiżi. Dawn id-delegazzjonijiet jsegwu mill-qrib ħafna d-drittijiet umani. Fl-1991, delegazzjoni tal-Parlament Ewropew kienet l-ewwel waħda tax-xorta tagħha li qatt ingħatat il-permess li żżur it-Tibet. Hemmhekk tqajmu mistoqsijiet dwar ksur ta’ drittijiet umani. Każ simili kien dak li seħħ f’nofs is-Snin Disgħin, meta d-delegazzjoni tal-Parlament Ewropew għar-Relazzjonijiet mar-Repubbliki taċ-Ċentru tal-Asja ħadmet bis-sħiħ u għamlet kampanja qawwija biex il-Parlament Ewropew itawwal l-approvazzjoni għal ftehim ta’ ‘partnership’ u koperazzjoni mal-Kazakhistan u Uzbekistan, kampanja li wasslet biex inkisbu konċessjonijiet qabel mal-Parlament fl-1999 laqa’ ż-żewġ talbiet imsemmijin. Sadattant, l-Assemblea Parlamentari Konġunta ACP-EU, li tagħha jien membru, fl-2002 kienet ħassret il-ħames sessjoni tagħha kawża tal-fatt li fid-delegazzjoni ta’ Zimbabwe fl-ACP kien se jkun hemm żewġ Ministri li kienu miżmumin mill-Unjoni Ewropea milli jivvjaġġaw. L-Unjoni Ewropea kif tista’ tassigura b’mod effettiv li ‘l barra mill-fruntieri tagħha jkunu rispettati d-drittijiet umani? Hu ovvju, li l-“karrotta” ewlenija tal-Unjoni Ewropea hi l-prospett ta’ ftehim bilaterali għal kummerċ ħieles mal-akbar suq fid-dinja. Imma, fl-istess ħin, il-“karrotta” riflessa fis-suq tal-Unjoni Ewropea sservi wkoll ta’ “għasluġ” biex jistimula riforma. Id-djalogu flimkien mal-“karrota u l-għasluġ” ekonomiku hu l-mod li ħadem bih s’issa l-Parlament Ewropew biex jikseb riżultat. L-akbar każ tal-“karrotta u l-għasluġ” huwa dak li jirrelata għad-dibatittu li għadu għaddej dwar Ftehim ta’ Assoċjazzjoni bejn l-Unjoni Ewropea u Iżrael. Bħal fil-każ ta’ Malta, l-Unjoni Ewropea hi l-akbar importatur ta’ prodotti minn Iżrael, u t-tieni l-akbar esportatur lejn Iżrael. Fis-sena 2006 in-negozju bejn l-Unjoni Ewropea u Iżrael kien jammonta għal 23.5 biljun Ewro. Għal dawn l-aħħar snin l-Unjoni Ewropea rreżistiet talbiet minn Iżrael biex jogħla l-livell ta’ relazzjonijiet bejniethom, bl-Unjoni Ewropea titlob li qabel isir dan irid ikun hemm progress min-naħa ta’ Iżrael fejn jikkonċerna l-konflitt Iżraeli-Palestinjan. Riċentement fil-Parlament Ewropew kienu dibatituti r-relazzjonijiet bejn l-Unjoni Ewropea u t-Tunezija, dibattitu profond, imma wkoll riskjuż, li jista’ jkollu konsegwenzi fir-relazzjonijiet bejn l-Unjoni Ewropea u t-Tuneżija. Kif irrimarkajt fis-sessjoni plenarja tal-Parlament Ewropew, id-dibattitu sar barra minn ħinu – fl-istess ħin li Parlamentari Tuneżini kienu qegħdin iżuru l-Parlament Ewropew, li bla dubju ħassewhom imbarazzati – b’uħud mill-kelliema jikkundannaw lill-Gvern Tunezin dwar kwistjonijiet li għandu mas-soċjetà ċivili. L-Unjoni Ewropea hi l-akbar sieħeb kummerċjali li għandha t-Tuneżija, konsistenti f’madwar 70% tal-importazzjoni Tuneżina (€9.5 biljun) u 75% tal-esportazzjoni Tuneżina (€9.9 biljun), żewġ ċifri li t-tnejn żdiedu b’mod sinifikattiv fis-snin li għaddew. Prova li t-Tunezija hi sieħeb mal-Unjoni Ewropea, toħroġ mill-fatt li meta fis-sena 2008 tneħħew it-tariffi fuq prodotti industrijali, it-Tuneżija kienet ukoll l-ewwel pajjiż Mediterranju li daħal fi ftehim ta’ kummerċ ħieles mal-Unjoni Ewropea. Waqt li kien għaddej dan kollu, riċentement kien hemm ħafna aktar sinjali ta’ titjib fid-djalogu bejn it-Tuneżija u l-Unjoni Ewropea kemm fuq livell ta’ Kummissjoni kif ukoll ta Parlament. Id-djalogu mal-Kummissjoni kien jinkludi l-ipprogrammar ta’ ħafna laqgħat ta’ sotto-kumitati fil-qafas tal-Ftehim ta’ Assoċjazzjoni Tuneżija-Unjoni Ewropea (nkluż s-Sotto Kumitat dwar id-Drittijiet Umani u d-Demokrazija) filwaqt li d-djalogu fuq livell ta’ Parlament Ewropew kien rifless fiż-żjara riċenti fi Brussels ta’ delegazzjoni importanti ta’ Parlamentari Tuneżini li kienet magħmula minn rappre żentanti tal-erba’ partiti politiċi rappreżentati fil-Kamra tad-Deputati Tuneżna, kif ukoll bil-laqgħa Interparlamentari Tuneżija–Unjoni Ewropea li għandha ssir f’Marzu li ġej fi Brussels. Ma jagħmel ebda sens li tkun kritikata u iżolata t-Tuneżija meta hu evidenti li sar progress f’ħafna sferi f’dan il-pajjiż. Li tikkawża imbarazzament politiku bla qliegħ tanġibbli jista’ jagħti lil xi Parlamentari Ewropej xi sens ta’ superjorità morali, imma tagħmel ftit ferm biex ittejjeb l-istatus tal-poplu Tuneżin. Ejjew nassiguraw li t-Tuneżija u pajjiżi oħrajn mhux membri tal-Unjoni Ewropea jikkonformu mal-livelli Ewopej fl-oqsma ekonomiċi, soċjali, politiċi u ta’ drittijiet umani. U ejjew nużaw il-mod tal-“karrotta” u l-“għasluġ” biex nassiguraw li t-transizzjoni lejn demokrazija funzjonabbli b’aktar minn partit wieħed tkun ġenwina. Imma ejjew nagħmlu dan bi djalogu ppjanat tajjeb u strutturat. L-ingranagg tar-riforma qiegħed jaħdem. Ejjew inħalluh jaħdem mingħajr tfixkil bla bżonn.

Europe’s response to the financial crisis – some success, but much more to do

2010-02-27T11:41:00.000+01:00

The Malta Independent - Saturday, 13th February 2010

My first Rapporteurship as an MEP drew closer to success this week following the committee vote on my report on the performance of the European Central Bank (ECB) in 2008 and 2009, as the ECB, EU and Member States battled to limit the damage caused by the financial crisis. The result, with the draft report approved by 35 votes and just 2 against, demonstrates, I hope, that a good balance was found. Of course, while the political negotiations in the Economic and Monetary Affairs committee have been concluded, they will resume again in February when my report is debated with President Trichet and then voted in Parliament. The work is far from over. I have found the experience as a Rapporteur to be a complex and multi-faceted role. Writing the report is the easy bit! The real challenge is the lengthy negotiation with colleagues from the other political groups, with President Trichet and other high-ranking ECB officials, and with fellow colleagues in my Socialist and Democrat party group, all of whom have political ‘red-lines’ and their own ideas. Reconciling these competing positions while still retaining the integrity and coherence of the text is a fine balancing act. The report itself, needless to say, focuses on the crisis that has engulfed European countries over the past two years. The financial and economic crisis has seen the worst global economic decline since the 1930s and the most rigorous test of the ECB since its inception. After a relatively benign period of economic growth enjoyed across most of Europe for over a decade most Member States have had their economy ‘stress-tested’, not through a simulated model but in real time and with painfully real consequences. In 2008, GDP growth across the euro area was just 0.7% and, by the time my report is voted in plenary, we will have the frightening statistics of a significant economic contraction together with a forecast of a very sluggish return to growth in 2010 and 2011. Most Member States are experiencing rising budgetary deficits and soaring government debt. The Commission’s economic forecasts in May 2009 predicted average budget deficits across the eurozone of 5.3% and average government debt of 77.7%, figures which, in turn, are both expected to increase in 2010. It may take many years for these deficits, brought about by the financial crisis, to return to the levels of 2006 and 2007. On balance, the ECB deserves qualified praise for its response to the crisis. The primary function of the ECB, according to the EU treaties, is to maintain “price stability” and, although inflation was far above the ECB’s self-imposed ceiling of 2% when it peaked at 4% in June and July 2008, inflation rates have since tumbled and are now at negative rates. The ECB has also steadily cut interest rates, from a peak of 4.25% in June 2008 down to 2% by January 2009 and the current rate of 1% in May, in a bid to re-invigorate lending and to kick-start the European economy. However, the ECB’s main role during the crisis has been to expand liquidity provisions in the form of a variety of loans amounting to over €500bn to effectively bail-out financial institutions. Without such financial life-support, many institutions holding our savings and pensions would undoubtedly have collapsed. But, this praise must be tempered. The ECB’s interest rate cuts were not as prompt as those taken by the likes of the US Federal Reserve and the Bank of England. Similarly, while the ECB’s massive cash injections have kept many institutions from collapse, the reality is that many banks have not passed on this liquidity to customers, particularly to the detriment of the small and medium sized businesses on whom economic recovery will rest. Instead, many banks have used the liquidity to buttress their own position - covering losses and, to justified public revulsion, bonus payments. However, the report is also about looking to Europe’s economic future. We need to put in place a planned ‘exit strategy’, with Member States gradually winding down their stimulus packages and the ECB drawing back the liquidity that it has provided to banks. My report concludes that such an ‘exit strategy’ in the monetary and fiscal fields should take place only after we can see a sustainable economic recovery, and calls for co-ordination on the timing of these exit strategies between Member States. Moreover, the European Commission should allow Member States to continue with their stimulus packages without forcing them to reverse this process through an over-enthusiastic early enforcement of the Stability and Growth Pact. Above all, the crisis has demonstrated that markets do not always self-correct and are prone to systemic risk. In this, I support the root-and-branch reforms to the financial architecture in the EU and, in particular, the establishment of a European Systemic Risk Board (ESRB) - a body designed to act as a ‘watch dog’ giving an early warning of any systemic risks or imbalances in the financial markets. In this regard the most immediate priority is to provide a qualitative definition of ‘systemic risk’ - it stands to reason that you cannot identify a problem if you lack a clear definition of what it is you are looking for! Creating such models must be an urgent priority for the ECB. Above all, lessons have to be learnt from the crisis, by the ECB and other central banks, financial institutions, regulators and politicians. We must restore public confidence in financial institutions through measures which include greater transparency and better risk management. We need to ensure that a crisis of this magnitude does not repeat itself again. Prof. Edward Scicluna is a Labour MEP

Koalizzjoni ta’ Nies Li Qegħdin f’Keffa Waħda

2010-02-27T11:40:00.000+01:00

L-indirizz ta’ l-Ewroparlamentari Laburista, l-Professur Edward Scicluna, lid-delegati tal-Konferenza Ġenerali Annwali 2010

Inħossni onorat li qiegħed nerġa nindirizza din il-laqgħa tant importanti. Din id-darba bhala wieħed mir-rapprezentanti tagħkom fil-Parlament Ewropew. Il-mozzjoni li għandna quddiemna hija ferm aktar importanti milli wieħed jista’ jaħseb. Hija tmur għal qalba ta’ kif organizzazzjoni politika, li tgawdi l-appoġġ tal-maġġoranza tal-poplu tal-pajjiż, trid iġġedded ruħa u tikber għall-suċċessi akbar. Il-mod sempliċi kif naqraħa jien hi li bażikament l-istrutturi tal-bieraħ tal-Partit Laburista kienu tajbin għaċ-ċirkostanzi tal-bieraħ iżda llum hemm bżonn strutturi oħrajn ġodda biex jindirizzaw iċ-ċirkostanzi tal-lum. Strutturi li jinkludu l-mod kif naħsbuha u naġixxu. Biex nifhmu aħjar dan, irridu nistaqsu lilna nfusna aħna min aħna. Minn fejn ġejna. Fejn sejrin. Nafu lkoll li l-Partit Laburista twieled bħala risposta tal-ħaddiem u tal-batut għal partiti oħra ta’ dak iż-żmien li l-interess tagħhom kien tas-sinjur u tan-negozjant. Għal dawn il-partiti l-interess tal-ħaddiem żgur li ma kienx jidher fuq l-iscreen tar-radar tagħhom. Maż-żmien gvernijiet Laburisti irnexxielhom b’ħafna għaqal u bżulija jgħollu l-livell tal-ħajja tal-ħaddiem, bir-riżultat li ħafna minnhom bdew isibu ruħhom fil-klassi medja sew permezz ta’ dħul u pensjonijiet aħjar, xiri ta’ djar bi prezz baxx, kif ukoll il-professjonijiet li huma jew it-tfal tagħhom setgħu jipprattikaw permezz tal-edukazzjoni li nagħtatilhom. Ironikament pero ġara li jew il-partit laburista ma baqgħax jappella għall-dawn il-ħaddiema jew il-familja tagħhom, kif ukoll għaliex il-partit l-ieħor għaraf jilqagħhom miegħu qisu kien hemm minn dejjem. S’intendi t-tberbieq tal-flus bla rażan għin ħafna tul dawn is-snin biex kulħadd iħossu komdu u llupjat. Ir-riżultat ta’ dan l-istat ta’ fatt jafu kulħadd – medda sewwa ta’ snin bil-Partit Laburista fl-oppozizzjoni. Illum pero x’insibu? Insibu li l-klassi tal-ħaddiema, il-klassi medja u n-negozjanti, issa waqgħu f’keffa waħda u taħt madmad wieħed rifless f’tassazzjoni qawwija, b’piżijiet għoljin kawżati mill-istess djun kbar, inflazzjoni kompletament barra minn żmiena, ekonomija mfarrka, b’governanza xejn kontabbli u trasparenti u b’xamma kbira ta’ korruzzjoni. In-negozjant illum qed jinduna li l-għadu tiegħu mhuwiex aktar il-Partit tal-Ħaddiema, l-anqas l-unjon tal-ħaddiema, iżda hu l-favoritiżmu, it-taxxi u tariffi esaġerati, Il-korruzzjoni, in-nuqqas ta’ trasparenza u n-nuqqas ta’ kontabilità. Dan hu l-veru għadu li qed jipperikolalu l-għixien tiegħu u tal-familja, kif ukoll tal-impjegati tiegħu. Iżda llum kif għandu jħares il-ħaddiem lejn in-negozjant? Dak li fil-passat kien anke saħansitra seta għajru ħalliel. L-ewwelnet bħal ma l-ħaddiem irid jaqla l-għixien tiegħu, in-negozjant irid jaqla tiegħu u tan-nies li jimpjega. Il-profit hu l-mod li jirrendilu ritorn fuq l-investiment tiegħu. Dawk il-flus seta poġġihom il-bank iżda għazel li jissugrhom. Pero iktar minn hekk illum l-ekonomija tagħlimna li n-negozjant ma tikkontrollaħx billi toqgħod tippriedkalu ħalli tikkonvertiħ imma billi tikkontrollalu s-suq li jaħdem fih. Tagħmel dan billi tneħħilu l-monopolji u l-prattiċi ristrettivi. Neħħi jew ikkontrolla dawn u l-preżżijiet waħidhom isibu l-livelli ġust tagħhom. Huwa għalhekk nesiġu li jkollna Regolaturi ta’ stoffa, sew fl-ippjanar, fit-trasport u komunikazzjoni, u d-dawl u l-ilma. Dawn il-monopolji jekk ma nikkontrollawhomx ser jibqgħu jifnuna u jwaqqawna fl-għaks. Fi ftit kliem irridu strutturi tas-swieq li jinkoraġixxu l-kompetitivita’ u b’hekk jirrendu negozju ġust. In-negozju joħloq sew il-ġid u x-xogħol għall-kulħadd. Huwa f’dan l-isfond li rrid nifraħ bit-twaqqif ta’ Business Forum fi ħdan il-Partit Laburista (u hawnhekk insellem lil Marlene Mizzi u l-membri kollha fuq dan il-forum). Dan il-forum ser iwassal għal ftuħ ta’ djalogu mal-faxex kollha tas-settur tan-negozju, speċjalment is-self-employed u l-entrapriżi ż-żgħar Maltin u Għawdxin. Il-futur huwa tagħna lkoll. Ejjew ningħaqdu ħalli nibdew ħajja ġdida li tipprometti l-ġid għalina u għall-uliedna.

'Carrot and stick' approach

2010-02-27T11:39:00.000+01:00

The Times - Saturday, 6th February 2010

The European Parliament has never avoided a debate about human rights or kept quiet for fear of hurting people's feelings. The defence of human rights lies at the heart of the EU, the creation of which was a response to World War II to ensure that the peoples of Europe resolved their political differences in parliamentary chambers and committee rooms rather than slaughtered each other on the battlefields. Sixty years on, the ratification of the Lisbon Treaty means that all European law must be consistent with the political, democratic and social freedoms contained in the Charter of Fundamental Rights. Moreover, the fact is that, when the European Parliament makes a statement about the political or human rights situation in a third country, that country sits up and listens. Despite not being a legislative committee, the Parliament's Foreign Affairs Committee is still widely regarded by political groups as the most coveted parliamentary committee and, while a European Parliament debate is not legislatively binding, it is a strong statement of political intent. Another means for the European Parliament to deal with human rights issues is through its parliamentary delegations. There are over 30 delegations linking the Parliament with countries across the world - ranging from joint parliamentary assemblies such as the ACP, EuroMed and EuroLat assemblies, to joint parliamentary committees established as part of association agreements to foster cooperation, to election observation missions. These delegations closely monitor the status of human rights. In 1991, an EP delegation was the first ever to be permitted to visit Tibet, where it raised questions of human rights violations. Similarly, in the mid-1990s, the Parliament's delegation for relations with Central Asian Republics vociferously campaigned for the Parliament to delay its approval for the partnership and cooperation agreements with Kazakhstan and Uzbekistan, successfully winning concessions before the Parliament finally gave its assent in 1999. Meanwhile, the ACP-EU Joint Parliamentary Assembly, of which I am a member, cancelled its fifth session in 2002 when the ACP delegation decided to include in the Zimbabwean delegation two ministers who were on the EU travel ban list. But how does the EU ensure effectively that, outside its borders, human rights are respected? Obviously, the main "carrot" is the prospect of a bilateral free trade agreement with the largest single market in the world. But, at the same time, the "carrot" of the EU market also acts as the "stick" to stimulate reform. This combination of dialogue and the economic "carrot and stick" approach is the way which the European Parliament has so far taken to get results. The most high-profile "carrot and stick" case relates to the ongoing debate about the association agreement between the EU and Israel. Like Malta, the EU is Israel's biggest importer of goods and its second biggest exporter. In 2006, the total traded between the EU and Israel amounted to €23.5 billion. For the last few years, the EU has resisted Israeli demands to upgrade relations, demanding progress from the Israelis relating to the Israeli-Palestinian conflict. Last week, the European Parliament held a debate on relations between the EU and Tunisia, a debate that has profound, but also risky, potential consequences for the EU-Tunisia relationship. As I pointed out in the plenary session, the debate was distinctly untimely - coinciding with a visit to the Parliament of Tunisian parliamentarians, doubtless causing them much embarrassment - with some speakers focusing their remarks on condemning the Tunisian government on contentious issues between the government and civil society. The EU is Tunisia's main trading partner, accounting for about 70 per cent of Tunisian imports (€9.5 billion) and 75 per cent of Tunisia's exports (€9.9 billion), figures which have both increased significantly in recent years. As a demonstration of Tunisia's status as an established trading partner with the EU, when it removed tariffs for industrial products in 2008, it became the first Mediterranean country to enter a free trade agreement with the EU. Parallel to this there have been several recent signs of improving dialogue between Tunisia and the EU at both Commission and Parliament level. Dialogue with the Commission has included the programming of several subcommittees' meetings within the framework of the Tunisia-EU association agreement (including the Human Rights and Democracy Subcommittee) while dialogue at the level of the European Parliament took the form of the recent visit in Brussels of an important Tunisian parliamentary delegation representing four political parties represented in the Tunisian Chamber of Deputies and with the Tunisia-EP inter-parliamentary meeting scheduled for March in Brussels. There is no value in criticising and isolating Tunisia when it is evident that progress in many spheres has taken place. Causing political embarrassment for no tangible gain might give certain parliamentarians a sense of moral superiority but would do little to improve the status of the Tunisian people. Let us ensure that Tunisia and other non-EU states conform to EU standards in the economic, social, political and human rights sphere. And let us use the "carrot and stick" approach to ensure that its transition to a functioning multi-party democracy is genuine. But let us do that in a well-planned and structured dialogue. The wheels of reform are in motion. Let us let them turn smoothly without unnecessary jolts. Prof. Scicluna is a Labour member of the European Parliament.

Il-bażi tar-regolamentazzjoni tal-utilitajiet

2010-02-27T11:38:00.000+01:00

www.l-orizzont.com - Is-Sibt 6 ta' Frar 2010

Fl-istorja, li issa ilha għad dejja, dwar iż-żidiet qawwijin fit-tariffi tad-dawl u tal-ilma u li riċentement kienet is-suġġett ta’ laqgħa turbulenti tal-MCESD, ma jistax ma jkunx innotat kemm il-Gvern jibqa’ stinat li jirrifjuta li jid diskuti t-tariffi nfushom anke jekk b’xi forma ta’ kumpens parzjali jipprova jtaffi xi ftit mill-weġgħat ikkawżati mit-tariffi. Huwa ferm diżappuntanti li tara li l-każ li qegħdin iġibu ’l quddiem l-imsieħba soċjali fil-laqgħat tal-MCESD ikun ridott għall-effett detrimentali li dawn iż-żidiet se jkollhom fuq in-negozji u l-impjiegi rispettivament. Dan wieħed jasal biex jif hmu. Madankollu l-MCESD issa nbidel fi speċi ta’ suq fejn l-operaturi jipprovaw jieħdu l-aħjar prezz li jistgħu, mingħand il-Gvern flok jiġġieldu għall-prinċipji ekonomiċi bażiċi li fuq hom irridu nibnu ekonomija effiċjenti u soda għal quddiem. Ma jfissirx li fil-passat l-imsieħba soċjali ma ressqux ’il quddiem argumenti mill-aspetti finanzjarji u ekonomiċi. Imma pożizzjonijiet bħal dawn, kemm mill-unjins tal-ħaddiema kif ukoll mill-għaqdiet ta’ min iħaddem, sabu lill-Gvern adamanti fuq kemm hi korretta l-istrateġija tiegħu fejn jidħlu t-tariffi. Din hi ħasra. Ghax jekk m’aħ niex ċari dwar il-prinċipji ekonomiċi li għandhom jiggwidaw lejn għażla ta’ strateġija korretta fejn jidħlu tariffi għall-utilitajiet pubbliċi, allura se jinħolqu preċedenti ħżiena. L-ekonomija tas-suq (imsejħa micro-econo mics) hija kompletament mibnija fuq kif għandna nħarsu li l-prezzijiet fl-istess suq għandhom ikunu korretti. Jekk le, l-ekonomija ssofri għax titlef ħafna mill-effiċjenza tagħha. Il-prinċipju li fuqu l-Gvern qed jibbaża l-istrateġija tiegħu fejn jidħlu tariffi ma setax ikun preżentat aħjar minn kif pre żen tat f’artiklu li kiteb b’kon vin zjoni riċentement fil-ġurnal The Times l-Avukat Austin Gatt, Ministru għall-Infrastrut tura, Trasport u Komunikazzjoni. Il-Ministru Gatt kiteb li “hemm involut punt ta’ prinċipju li nemmen li huwa fundamentali biex tifhem kif għandu jopera tibdil fit-tariffi. L-ewwel prinċipju huwa li, huma ta’ liema natura huma t-tariffi, dawn għandhom jagħmlu tajjeb għall-ispiża operazzjonali kollha u jipprovdu lill-operatur b’ritorn adekwat fuq l-investiment. Din mhix sem pliċi kwistjoni ta’ regolamentazzjoni tal-Unjoni Ewropea u liġi lokali, imma wkoll kwistjoni li tagħmel sens ekonomiku.” L-ewwel osservazzjoni tiegħi hi li dan l-argument ma fihx xi principju ġdid. Huwa fil-fatt l-argument tipiku li kull operatur monopolistiku jressaq ’il qud diem għall-attenzjoni tar-Re golatur. Huwa ċar daqs il-kristall li l-Ministru qed jiddefendi l-pożizzjoni tal-EneMalta kif għamlu ħafna ministri qablu sa mill-bidu tas-snin 80. Ħafna ministri saru ħaġa waħda mal-monopolji parastatali u korporazzjonijiet li jaqgħu taħthom b’tali mod li ħafna drabi spiċċaw ċermen tagħhom de facto. Mhux ta’ b’xejn li ħafna snin qabel is-sħubija fl-Unjoni Ewropea, madwar 18-il sena ilu, fi studju li għamilt għall-Federazzjoni tal-Industriji (FOI) fuq l-istrutturar tal-ekonomija, insistejt b’qawwa li għandhom jitwaqqfu Regolaturi Nazzjonali biex jieħdu f’idejhom il-prattiċi tal-Ministri biex ma jibqgħux preġudikati. Ejjew neżaminaw id-duttrina l-ġdida tal-Ministru Gatt fir-rigward ta’ ffissar ta’ tariffi. Tista’ timmaġina li tagħmel sens li xi operatur f’suq kompetittiv, hu x’inhu l-ġeneru ta’ negozju tiegħu kemm jekk għas-suq lokali kif ukoll għall-esportazzjoni, jitlob, U, jippretendi li jingħata tariffa li tkun tkopri l-ispiża sħiħa tal-operazzjoni tan-negozju u ritorn adekwat fuq l-investiment tiegħu? Veru jkun joħlom jekk jaħseb li dan jista’ jsir bi dritt! Il-mod ta’ kif fil-verità jaħdem is-suq għandu punt ta’ tluq differenti minn hekk. L-operatur f’suq kompetittiv, iffaċċjat mill-prezz tas-suq, irid, biex isalva, jimmira li jniżżel l-ispiża għal dak li s-suq jiflaħ iġorr, bit-tama li dan iħallilu ritorn diċenti biex ikun jista’ jkompli jaħdem. Għal dan ma tingħata ebda garanzija. La d-di rettiva tal-Unjoni Ewropea, la l-liġi Maltija u lanqas is-sens komun ma jistgħu jiggarantixxu li s-suq kompetittiv se tiġih ħniena minn xi operatur biex iżommu fin-negozju billi jkoprilu l-ispiża operazzjonali b’ritorn adegwat fuqha. Monopolju mhux regolat m’għandux dawn il-limitazzjonijiet tas-suq u jsir theddida għall-effiċjenza ekonomika u għas-soċjetà kollha jekk jitħalla juża l-kriterji tiegħu biex jasal għal prezzijiet monopolistiċi bbażati fuq is-sens egoistiku tiegħu. Huwa hawn li għandu jaġixxi r-Regolatur meta konfrontat b’operatur li, għal raġunijiet varji, m’għandux kompetizzjoni fis-suq tiegħu. Ir-regola hija sempliċi ħafna. Ir-Regolatur għandu jassigura li jistabbilixxi t-tariffi tal-monopolji f’livell li kien is-suq kieku kien jeżisti. Iffaċċjat minn dan il-prezz tar-Regolatur l-operatur monopolistiku, bħall-EneMalta, għandu mbagħad ikun sforzat inaqqas l-ispiża biex jassigura li jkun hemm ‘surplus’ adekwat biex b’hekk ikompli bl-investi ment tiegħu. F’Malta r-Regolatur għadu ma sabx saqajh, bil-konsegwenza li d-deciżjonijiet tal-Kor porazzjoni fejn jidhlu tariffi u investiment huma fid-deskrizzjoni, kif jgħoġbu, il-Ministru tal-ġurnata. Mhux sorpriża li l-korporazzjonijiet pubbliċi tagħna qegħdin jiffaċċjaw problemi kbar finanzjarji u ta’ investiment. Imma min għandu jagħmel tajjeb għad-differenza fid-dħul miġbur mit-tariffa li Regolatur, mgħammar adekwatament u indipendenti, jasal għaliha bħala adekwata, u l-ispiża operazzjonali li tressaq ’il quddiem il-korporazzjoni kawża ta’ ineffiċjenzi maniġerjali, tekniċi u ekonomiċi, passati u preżenti? Mill-ġdid, hawnhekk insibu konfużjoni fil-mod kif jaħseb il-Gvern, għalkemm il-prinċipji mressqin mill-Ministru huma ċari biżżejjed. Għal kemm konvinċenti wkoll, sfortunatament mhux ħielsa milli jinkisru wkoll. Jagħmel tajjeb għal din l-ineffiċjenza ċara huwa dak li jissejjaħ “sussidju”, forma ta’ rigal lill-produtturi privati u konsumaturi. Is-soċjetà fis-sens wiesa’ tagħ ha jkollha tħallas għad-dnubiet ekonomiċi tal-im għoddi. Imma l-piż finanzjarju ghandu jithallas bl-aktar mod newtrali li nistgħu nsibu fis-sistema ta’ tassazzjoni tagħ na, b’mod li l-piż jinqasam. Meta nagħmlu hekk għandna nassiguraw li l-prezzijiet relattivi għal materja prima bħaż-żejt ma jkunx hemm tbagħbis magħhom. Qegħdin f’suq kompetittiv immens fejn jirrigwarda manifattura, turiżmu u servizzi finanzjarji. Traqqigħ tas-sistema tagħna tal-prezzijiet jista’ jsir biss b’detriment għall-oqsma ekonomiċi u soċjali tagħna.

Is Greece eurozone's Iceland?

2010-02-27T11:37:00.000+01:00

The Times - Friday, 11th December 2009

The financial crisis has taken many casualties. Aside from the impact that the recession has had on all countries across the world, two particular cases stand out. In 2008, Iceland's sudden prosperity built around its banking sector collapsed and the country effectively went bust. Last week, the collapse of the state-owned company Dubai World brought Dubai to its knees. Investors are starting to seriously worry about the possibility of more countries defaulting on their debts. In the euro-area, there is one country that everyone is talking about as the likeliest candidate: Greece. So, will Greece become the eurozone's Iceland and default on its debt? There is no doubt that Greece is in terrible economic trouble. Prices on credit default swaps tied to Greece, which are essentially used as insurance against bad government debt, are rising and its credit rating has already been downgraded from A to A-. Meanwhile, the difference in bond market spreads between Greek government bonds and German bonds has also increased rapidly despite the fact that Greece already paid significantly more on its government bond spreads than other EU countries. Their new Finance Minister, George Papaconstantinou, went as far as to write an article in last week's Wall Street Journal in a bid to reassure investors and commentators that, while the country was in recession and facing a grave fiscal situation, it would not go bankrupt. Of course, the "Greek problem" is not new. Greece has spent most of this decade living with spiralling government debt and high Budget deficits. On the latter point, the outgoing conservative government bequeathed to its socialist successor books that were cooked. This year's Budget deficit is now expected to be 12.7 per cent of GDP as opposed to the eight per cent stated by the outgoing Administration. Greece's government debt is projected to rise to 135 per cent by 2011. Greece, like Italy and several other member states, viewed the eurozone as a modern day "Noah's Ark" that would save them from financial turmoil. Like Malta, they took short-term measures to ensure that they joined the euro swiftly but did not make the deeper structural reforms to ensure greater labour market flexibility and productivity and the sustainability of their public sector programmes. However, the socialist government has demonstrated that it understands the gravity of the situation and is ready to act. Prime Minister George Papandreou, just a week after being elected in October, admitted that his country's economy was "in intensive care" adding that Greece was facing "the worst economic crisis since the restoration of democracy". Moreover, Mr Papandreou has the advantage that Greek public opinion know the mess that his government inherited and this should give him public support to make necessary but normally unpopular policy reforms. He has proposed a draft Budget for 2010 that includes a €3 billion fiscal stimulus programme and higher spending in education and health but stiff spending cuts elsewhere. These include a 25 per cent reduction in government consumption spending, a civil service hiring freeze in 2010, whereby only one new worker will be hired for every five who retire, and cuts to defence spending. They have also promised to grasp the nettle of pension reform and measures to tackle tax evasion. The Greek government expects these budgetary measures to reduce the deficit to 9.1 per cent by the end of next year. Still, these are fine words but they need to be matched by results. The response of financial markets indicates that they are far from convinced. One thing is for sure: they can expect few favours from the EU. The EU's Stability and Growth Pact, which stipulates that countries should keep government debt levels below 60 per cent and Budget deficits below three per cent, has taken a real battering during the crisis. Virtually all EU countries, including Malta, have breached the terms of the SGP and the Commission and the European Central Bank are desperate to ensure that their rules encouraging fiscal prudence are not completely abandoned. At the meeting of European finance ministers last week, Greece braced itself for stiff penalties. In other words, it is quite possible that a supplementary Budget, delivering further deficit cuts will be demanded. But I still think it is unlikely that Greece will go bust. As a member of the eurozone, it will not be allowed to and the ECB's president, Jean-Claude Trichet, continues to brush aside questions from journalists about the possibility of a eurozone country going bankrupt. For one thing, the eurozone is as much about political union as it is economic and monetary union. For a country to effectively drop out of the eurozone would be profoundly embarrassing for the EU. So, after all, can one say that being a euro member indeed offers a certain protection from sovereign debt default? Not so fast. The answer is in the affirmative but not for reasons implied by the "Noah's Ark" school. In fact, default is unlikely due to a combination of market discipline, peer pressure and the EU's SGP. It is through enormous sacrifices and painful policy measures "forced" on a eurozone country that will finally save it from bankruptcy. There will definitely be no soft bail-outs from the EU. Nonetheless, Greece's predicament should serve a salutary warning to others, including Malta. Running up huge government debts and Budget deficits, cooking the books with creative accounting and treating euro membership as though it provides you with a blank cheque, catches up with you eventually. Without credible public finances and fiscal and monetary discipline, a sustainable return to growth and normality is no more than a pipedream in or outside the eurozone. Prof. Scicluna is a Labour member of the European Parliament

Il-Greċja: l-Islanda taż-Żona Ewro?

2010-02-27T11:36:00.000+01:00

l-orizzont - Is-Sibt 19 ta' Diċembru 2009

IL-KRIŻI finanzjarja ħalliet ħafna vittmi. Apparti l-impatt li r-riċessjoni kellha fuq il-pajjiżi kollha tad-dinja, jispikkaw żewġ każi partikolari. Fis-sena 2008 il-prosperità mibnija f’daqqa fuq is-settur bankarju li esperjenzat l-Islanda, ikkollassat, u l-pajjiż effettivament falla. Ftit tal-jiem ilu l-waqgħa tal-kumpanija statali Dubai World niżżlet lil Dubai għarkuptejh. L-investi¬turi issa qegħdin jitħassbu serjament dwar il-possibiltà li jkun hemm pajjiżi oħrajn li jgħaddu mill-istess esperjenza kawża tad-djun tagħhom. Fiz-Żona Ewro hemm pajjiż wieħed li kulħadd qed jitħasseb dwaru bħala li jista’ jgħaddi mill-istess esperjenza: il-Greċja. Wieħed jistaqsi: il-Greċja se tkun l-Islanda taż-Żona Ewro u tbatti taħt id-djun tagħha? M’hemm ebda dubju li l-Greċja tinsab f’inkwiet ekono¬miku kbir ħafna. Sitwazzjoni li wasslet biex jitbaxxa l-livell ta’ ‘credit rating’ tal-Greċja, li minn A tniżżel għal A-. Sadanittant id-differenza fir-rati tal-imgħax fuq il-bonds kompliet tiżdied bejn il-bonds tal-Gvern Grieg u dawk Ġer¬maniżi kompliet tit¬wessa, minkejja l-fatt li l-Greċja diġà ħallset ferm aktar fuq il-bonds tagħha minn kull pajjiż ieħor tal-Unjoni Ewropea. Il-Ministru tal-Finanzi l-ġdid tal-Greċja, George Papa¬constantinou, wasal biex jikteb artiklu fil-Wall Street Journal fi sforz biex jassigura lill-investituri u lill-kummentaturi finanzjarji li waqt li l-pajjiż jinsab f’riċessjoni u qed jiffaċċja sitwazzjoni fiskali gravi, il-Greċja mhux se tfalli. Huwa veru li l-“problema Griega” mhix xi ħaġa ġdida. Il-Greċja għaddiet parti kbira minn dawn l-aħħar għaxar snin bi djun dejjem jikbru u b’defiċits fil-baġits għoljin mmens. Dwar dan id-defiċit il-Gvern Soċjalista attwali wiret mingħand il-Gvern Konservattiv “kotba mbagħbsin”. Id-defiċit għal din is-sena mistenni jkun jammonta għal 12.7% tal-Prodott Gross Domestiku, kuntrarjament għal 8% kif kien dikjarat mill-Gvern Konservattiv. Huwa pproġettat li sas-sena 2011 id-dejn tal-Gvern Grieg mistenni jkun tela’ għal 135%. Il-Greċja, bħall-Italja u ħafna pajjiżi oħrajn tal-Unjoni Ewro¬pea, kienu qegħdin iħarsu lejn iż-Żona Ewro bħala l-verżjoni moderna tal-Arka ta’ Noe li ssalvahom mid-diżastru finanzjarju. Bħal Malta, il-Greċja ħadet miżuri fil-qosor biex tassigura li tin¬għaqad mal-Ewro malajr, imma m’għamlitx ir-riformi strutturali fil-fond biex tassigura pro¬dut¬tività akbar kif ukoll is-sostenn tal-programmi tas-settur pubbliku. Madankollu, il-Gvern Soċjalista Grieg wera li fehem il-gravità tas-sitwazzjoni u hu lest li jaġixxi. Il-Prim Ministru Grieg, George Papandreou, ġimgħa biss wara li ngħata s-setgħa f’Ottubru li ghadda, ammetta li l-ekonomija ta’ pajjiżu kienet “fil-kura intensiva” u żied li l-Greċja kienet qed tiffaċċja “l-agħar kriżi ekonomika mir-ritorn għad-demokrazija”. Papandreou għandu l-vantaġġ li l-opinjoni pubblika hija konxja tad-diżastru li wiret il-Gvern tiegħu u dan għandu jagħtih l-appoġġ pubbliku għall-miżuri meħtieġa imma mhux popolari. Il-Prim Ministru Grieg ippropona abbozz ta’ baġit li filwaqt li jinkludi programm ta’ stimulu finanzjarju ta’ tliet biljun ewro; nefqa akbar fl-edukaz¬zjoni u s-saħħa, fl-istess ħin tnaqqis fin-nefqa f’oqsma oħra. Miżuri li jinkludu tnaqqis ta’ 25% fuq il-konsum tal-Gvern; iffriżar fuq l-impjiegi fis-servizz ċivili, b’mod li jkun impjegat wieħed għal kull ħames impjiegi li jispiċċaw bl-età tal-irtirar; kif ukoll tnaqqis fin-nefqa għad-difiża. Il-Gvern wiegħed ukoll riforma fil-pensjoni u miżuri biex tkun miġġielda l-evażjoni tat-taxxa. Il-Gvern Grieg qed jittama li b’riżultat ta’ dawn il-miżuri, sa tmiem is-sena 2010 id-deficit ikun tniżżel għal 9.1%. Tamiet sbieħ li għad iridu jkunu kumplimentati bir-riżultati. Ir-reazzjoni tas-swieq finanzjarji turi li huma ferm bogħod minn konvinti. Ħaġa waħda hija ċerta: il-Greċja, u min hu bħalha, ma jistgħux jistennew wisq favuri mill-Unjoni Ewropea. Il-Patt tal-Unjoni Ewropea għall-Istabilità u Tkabbir (SGP), li jistipula li l-pajjiżi membri għandhom iżommu l-livelli tad-djun taħt is-60% u d-defiċit tal-baġit taħt it-3%, ħa daqqa sewwa waqt il-kriżi. Fil-verità l-pajjiżi kollha tal-Unjoni Ewropea, inkluż Malta, kisru dak li jgħid l-SGP, bil-Kummissjoni u l-Bank Ċentrali Ewropew f’attentati ddisprati biex jassiguraw li r-regoli tagħhom li jinkoraġġixxu pru¬denza fiskali ma jkunux abbandunati totalment. Fil-laqgħa tal-Ministri tal-Finanzi Ewropej ta’ ftit jiem ilu, il-Greċja ppreparat lilha nnifis¬ha għal penalitajiet iebsin. Fi kliem ieħor, huwa possibbli li l-Greċja tintalab tagħmel baġit supplimentari li fih jintalab aktar tnaqqis. Jien xorta għadni nemmen li l-Greċja ssalva. Bħala mem¬bru taz-Żona Ewro mhux se tit¬ħalla ma ssalvax, bil-President tal-Bank Ċentrali Ewropew, Trichet, ikompli jwarrab mistoqsijiet tal-ġurnalisti dwar il-possibiltà li pajjiż fl-Ewro jispiċċa fallut. Iż-Żona Ewro hija għaqda po¬litika daqskemm hija għaqda ekonomika u finanzjarja. Ikun imbaraz¬zanti ferm għall-Unjoni Ewropea kieku kellu jiġri li pajjiż jaqa’ mill-Ewro. Allura wara kollox, wieħed jista’ jgħid li l-fatt li tkun mem¬bru tal-Ewro jiggarantixxi protezzjoni milli ċċedi taħt id-dejn nazzjonali? Mhux daqs¬tant b’mod mgħaġġel. It-tweġiba hija fl-affermattiv, imma mhux għar-raġunijiet implikati minn dawk li jsostnu l-verżjoni tal-Arka ta’ Noe. Filfatt is-salvazzjoni, jekk, u meta sseħħ, se sseħħ b’riżultat ta’ dixxiplina mis-suq, mir-’Rating Agencies’ u mill-IMF, minn pressjoni tal-Patt tal-Unjoni Ewropea għall-Istabilità u t-Tkabbir… kollha flimkien. Huwa permezz ta’ sagrifiċċji enormi u miżuri iebsin furzati fuq pajjiż membru taż-Żona Ewro li finalment iwasslu biex isalvaw pajjiż minn falliment. Definittivament l-Unjoni Ewropea mhux se sservi ta’ salvatur faċli. Minkejja kollox, l-istorja Griega għandha sservi ta’ twissija b’saħħitha lil pajjiżi membri oħrajn, fosthom Malta. It-tkabbir tad-djun u d-defiċits tal-baġit, tbagħbis tal-kotba u l-fehma li sħubija fl-Ewro se tipprovdi ċekk mif¬tuħ, eventwalment iwassluk għal saram kbir. Mingħajr finanzi pubbliċi kredibbli u dixxiplina fiskali u monetarja, ir-ritorn sostenibbli għal tkabbir ekonomiku u normalità m’huma xejn aktar minn ħolma sew jekk tkun membru taż-Żona Ewro kif ukoll jekk tkun barra.

When Brussels called our bluff

2010-02-27T11:35:00.000+01:00

The Times - Tuesday, 17th November 2009

I suppose we should all be glad that our Minister of Finance has finally come to the conclusion that it is impossible for Malta to meet the 2010 deadline to correct its excessive deficit and to ask for the Commission to extend its deadline for Malta. It is, however, pertinent to ask why it has taken him so long to do just that. Back in July, one of my first actions as a new MEP was to table a parliamentary question to the European Commission asking why Malta had only been given a year to cut its deficit from 4.5 per cent to three per cent while other countries had been given deadlines of 2013 or even longer. Essentially, the Commission's reply ignored the recommendations made by the IMF proposing a 2013 deadline and added that "special circumstances" for Malta did not exist. In my maiden speech to the Parliament in Strasbourg in September, in advance of the G20 summit in the United States the following week, I returned to the theme. The EU Commissioner for Economic and Monetary Affairs, Joaquin Almunia, told us twice (once in committee and then the following day in Parliament) that no EU country should stop economic stimulus packages until we can see a clear return to economic growth. Indeed, there is general agreement on this across the EU and in the US. But how could Malta cut its deficit by over 1.5 per cent without damaging our long-term economic and employment prospects? It was a completely contradictory position, and I said so. All along, the government and my two MEP colleagues from the EPP were giving the impression that the government intended to keep to its Excessive Deficit Procedure (EDF) deadline and my repeated imploring with EU officials was practically frowned upon. The reasons for this are not hard to tell. This Nationalist government's behaviour follows a familiar template. One: when the economy is in trouble keep a stiff upper lip and deny any problems. Two: give optimistic budgetary forecasts so that negative outcomes could be portrayed as unexpected surprises rather than entirely predictable outcomes. This negotiating strategy was so well played that, initially, the EU Commission believed the ruse that our excessive deficit was transient and not significant. I did point out at the time that I could not believe the Commission could be so naïve. It was not. Just a few weeks later the Commission called the government's bluff, seemingly taking at face value the government's inaccurate and misleading assertion that Malta's excessive deficit was just a one-off slip and would be swiftly corrected. For this reason, while confirming that the deficit was structural and not transient, it duly slapped an EDP on Malta and gave us the shortest compliance deadline of any other EU member state in a similar predicament. The government should never have allowed to paint itself into such a tight corner with so little room to manoeuvre. How else can one explain the 2010 Budget where the government not only shirked from taking bold economic measures, such as cutting VAT on tourism-related services, but instead is forced to introduce a spate of hidden taxes by reducing its budgetary allocations to rent seeking organisations and corporations that are now expected to collect their revenues from new tariffs and other charges. In short, the government is in a difficult economic position that has greatly reduced its capacity to introduce effectively vital economic stimulus measures. This spring, the Commission, in responding to the Stability Programme for 2009 by the government, stated that "the risks of Malta delivering on any of its risks are high". They were being generous. Thanks to a dose of cosmetic accounting and more one-off schemes, the government gives, as always, the impression that its deficit is under control. In reality it is very obvious that the government cannot deliver on its promises to reduce our national debt and budget deficit. Minister Fenech tells us that a contraction in Malta's economy means that the circumstances have changed from when the EU made its decision in May about Malta's excessive deficit. The truth is that nothing has changed except his own perception of reality, which has been staring him in the face all along. Prof. Scicluna is a Labour member of the European Parliament.

Meta l-UE qliet lill-Gvern f’żejtu

2010-02-27T11:34:00.000+01:00

www.l-orizzont.com - L-Erbgħa 18 ta' Novembru 2009

NISSOPPONI li kollha għandna nkunu kuntenti li finalment il-Ministru tal-Finanzi wasal għall-konklużjoni li huwa impossibbli li Malta tirregola d-defiċit eċċessiv tagħha sas-sena 2010 u li jitlob lill-Kummissjoni Ewropea testendi t-terminu għal Malta biex tilħaq dan il-għan. Madan-kollu, huwa pertinenti li nistaqsu għaliex il-Ministru Fenech ħa daqstant żmien biex jagħmel proprju dan. Lura f’Lulju li għadda, fost l-ewwel ħidmiet tiegħi bħala Membru Parlamentari Ewropew, kienet interpellanza bil-miktub li biha staqsejt lill-Kummissjoni Ewropea għaliex Malta kienet ingħatat biss sena żmien biex tnaqqas id-defiċit tagħha minn 4.5% għal 3% meta pajjiżi oħrajn ingħataw żmien sas-sena 2013 u anke aktar. Essenzjalment it-tweġiba tal-Kummissjoni injorat ir-rakkomandazzjonijiet tal-Fond Monetarju Internazzjonali (IMF) li ppropona żmien sas-sena 2013 u qalet li “ċirkostanzi speċjali” għal Malta ma jeżistux. Fl-ewwel diskors tiegħi lill-Parlament Ewropew fi Strasbourg f’Settembru li għadda bi preparazzjoni għas-summit tal-G20 fl-Istati Uniti l-ġimgħa ta’ wara, erġajt qajjimt il-każ tad-defiċit ta’ Malta. Joaquin Almunia, il-Kummissarju Ewropew għall-Affarijiet Ekonomiċi u Monetarji, qalilna dar-btejn (darba fil-kumitat u l-għada fil-Parlament) li ebda pajjiż membru tal-Unjoni Ewropea m’għandu jwaqqaf il-pakkett ta’ stimulu ekonomiku qabel ma nkunu nistgħu naraw ritorn ċar għal tkabbir ekonomiku. Hemm qbil ġenerali dwar dan kemm fl-Unjoni Ewropea kif ukoll fl-Istati Uniti. Imma Malta kif tista’ tnaqqas id-defiċit tagħ-ha b’aktar minn 1.5% bla ma tagħmel ħsara lill-prospetti fit-tul fl-oqsma ekonomiċi u tax-xogħol? Kienet pożizzjoni kontradittorja kompletament, u dan hu dak li kont għidt. Sadattant, il-Gvern u ż-żewġ Membri Parlamentari Ewropej Nazzjonalisti kienu qegħdin jagħtu l-impressjoni li l-Gvern kien intenzjonat li jżomm maż-żmien mogħti għal tnaqqis fid-defiċit (EDP - Excessive Deficit Procedures), u prattikament jirrabjaw għall-appelli tiegħi ma’ uffiċjali tal-Unjoni Ewropea. Ir-raġunijiet għal dan mhux diffiċli tasal għalihom. L-attitudni tal-Gvern Nazzjonalista ssegwi mudell familjari. L-ewwel: meta l-ekonomija tkun fl-inkwiet, iċħad li hemm problemi. It-tieni: agħti tbassir baġitarju ottimistiku biex ir-riżultati negattivi jitpinġew bħala sorpriżi mhux mistennijin flok riżultati kompletament prevedibbli. Inizjalment din l-istrateġija ta’ negozjar intlagħbet tajjeb ħafna, tant li l-Kummissjoni Ewropea emmnet l-istrataġemma li d-defiċit eċċessiv kien wieħed li jgħaddi malajr u mhux wieħed sinifikanti. Dak iż-żmien kont irrimarkajt li ma stajtx nemmen li l-Kummissjoni Ewropea kienet daqstant “fidila”. Ma kinitx. Ftit ġimgħat wara l-Kummissjoni qliet lill-Gvern Malti f’żejtu, billi tat l-impressjoni li qiegħda tieħu bħala vera d-dikjarazzjoni żbaljata u qarrieqa tal-Gvern li d-defiċit eċċessiv kien nuqqas ta’ darba li jista’ jkun malajr ikkoreġut. Għal din ir-raġuni, waqt li kkonfermat li d-defiċit kien wieħed strutturali u mhux li jgħaddi malajr, ħabbtet ma’ wiċċ Malta EDP u tatna l-iqsar terminu ta’ żmien biex id-defiċit jinġieb f’postu meta kkomparat ma’ kif imxiet ma’ pajjiżi oħrajn membri tal-Unjoni Ewropea li kienu fl-istess sitwazzjoni tagħna. Il-Gvern qatt ma messu poġġa lilu nnifsu f’rokna ristretta bħal din bi ftit spazju fejn jimmanuvra. Kif jista’ xi ħadd jispjega b’mod ieħor il-Baġit għas-sena 2010 fejn il-Gvern mhux biss żamm lura milli jieħu miżuri ekonomiċi sodi, bħal tnaqqis tal-VAT fuq servizzi relatati mat-turiżmu, imma minflok kien sforzat jintroduċi taxxi moħbijin billi jnaqqas allokazzjonijiet finanzjarji fil-Baġit lill-organizzazzjonijiet u korporazzjonijiet li issa huma mistennijin li jiġbru huma l-flus minn tariffi ġodda u ogħla, u ħlasijiet oħrajn. Fi ftit kliem, il-Gvern jinsab f’sitwazzjoni ekonomika diffiċli li naqqsitlu bil-kbir l-kapaċità tiegħu li jintroduċi miżuri effettivi u vitali biex jistimula l-ekonomija. Fir-rebbiegħa li għaddiet, il-Kummissjoni, meta kienet qie-għda twieġeb għall-Programm ta’ Stabilità mill-Gvern għas-sena 2009, qalet li “r-riskji li Malta twassal fuq xi wieħed mir-riskji li ħadet, huma għoljin”. Kienu ġenerużi magħna meta qalu hekk. Grazzi għal doża ta’ kontijiet kosmetiċi u aktar skemi ta’ darba, il-Gvern, bħal dejjem, jagħti l-impressjoni li d-defiċit huwa taħt kontroll. Fil-verità huwa ferm ovvju li l-Gvern Nazzjonalista ma jistax isarraf il-wegħdi tiegħu li jnaqqas id-dejn nazzjonali u kif ukoll d-defiċit tal-Baġit. Il-Ministru Fenech jgħidilna li tnaqqis fl-ekonomija Maltija jfisser li ċ-ċirkostanzi nbidlu minn meta f’Mejju li għadda l-Unjoni Ewropea ħadet id-deċiż-joni tagħha dwar id-defiċit eċ-ċessiv ta’ Malta. Il-verità hi li xejn ma nbidel ħlief il-mod tal-Ministru stess ta’ kif iħares lejn ir-realtà li ilha tħares fiss f’għajnejh it-triq kollha.

When jobs are at risk

2009-06-04T22:40:00.000+02:00

by Prof. Edward Scicluna, timesofmalta.com - Mon 1st June 2009

Prime Minister Lawrence Gonzi is in the unenviable situation where he has left himself no room for manoeuvre to cushion our economy against the ravages of the international situation and save jobs. Instead, he has to start the whole deficit cutting exercise all over again, this time under the direct orders of the European Union through its excessive deficit procedure.

In his recent outburst against opposition criticism and mine in particular, the Prime Minister lectured his audience on the euro peg but failed to mention that our economic history since World War II reports only two Maltese lira devaluations, one in 1967 and the other in 1992. Both were carried out under Nationalist administrations.

The Prime Minister referred to the interview I had on timesofmalta.com wherein I had stated that I considered that the present predicament of the economy and public finances were due to two major wrong economic decisions taken in the past. One was the refusal by the Gonzi government to utilise the +/- 15 per cent band around the then existent parity during the ERMII period. This had been suggested by the European Commission.

At that time, I considered this refusal as "the worst advice the Prime Minister was to be given for many years to come".

I had argued that the float within the band during the two years prior to euro adoption would have given the chance to our lira to find its real value against the euro. This would have allowed our monetary authorities to choose the most suitable permanent euro/lira peg, which would have helped Malta's export competitiveness and the creation of more jobs.

It was the Prime Minister's mistake at that time to ignore this advice and trivialise the issue with the infamous devaluation scare. Four years later, on the eve of the European Parliament elections, Dr Gonzi repeats this mantra to deviate attention from the required policy measures needed to take us out of the present economic quandary.

The second wrong decision was to concentrate solely on deficit cutting to the detriment of economic growth and to carry out this exercise solely by increasing taxation.

The way we should have reduced the deficit I had spelt out in a paper presented at a Chamber of Commerce conference in 2003 entitled Cutting The Deficit: We Can Do It. I had warned that previous attempts by other countries such as Ireland to cut the deficit by raising taxes would not succeed in achieving sustainable public finances. This was also ignored.

When the period of euro examination was nearing, as a euro expert appointed by the European Commission, I was given to understand that Malta was failing the stress tests carried out with regard to the debt/GDP ratio. I had reported this in various interviews.

I had advised that the debt ratio was to be brought down not by the one-off proceeds from privatisation but by more diligent control of public expenditure programmes through appropriate reforms. This would have succeeded in putting our public finances on a sustainable path.

The real cost of ignoring this economic advice showed itself in our very first year of euro membership. In one single year (2008) we managed to reverse a seven-year stint of sacrifices of deficit reduction through higher taxation. Our deficit shot up to 4.7 per cent, the inflation went up to over five per cent at a time when the whole world was facing deflation, and the debt accelerated its upward climb. This has brought the wrath of the European Union, which has initiated the excess deficit procedure against Malta. The Gonzi government cannot tell us it was not forewarned.

Finally, as an economist, I have consistently been in favour of euro membership once the much-awaited structural reforms would have been in place. It is sad to note that these much-awaited reforms, notably in health, education and pensions, have failed to materialise in the period prior to EU membership as well as in the period prior to Malta joining the euro. Today, the Prime Minister is still talking about these reforms.

It is up to the electorate to judge who has indeed weakened the economy and its public finances and put Maltese workers' jobs at risk.

Prof. Scicluna will be contesting the MEP elections on a Labour Party ticket.

Il-biza' ta' Lawrence Gonzi

2009-06-01T19:47:00.000+02:00

it-Torca - Il-Hadd 31 ta' Mejju 2009

M’hijiex sewwa-sew htija tieghi li hemm min, fosthom il-karikaturisti, ipingini bhala biza ta' Dr Gonzi.

Jiena dejjem ippruvajt nghid il-verita’ fid-dawl ta' ricerka onesta li naghmel fil-qasam li nifhem fih, jigifieri l-ekonomija. Kif naraha jien, u ta' dan xbajt naghti provi, il-pajjiz ilu jehtieg qawmien ekonomiku kif jixraqlu.

Tistaghgeb li jekk Dr Gonzi ma jaghtix kas x'jghidulu l-esperti, l-esperti jkollhom iduru kontrih? lmma l-PN mhux din biss ma nizzilx dwari, imma li hrigt bhala kandidat ghall-elezzjoni Ewropea mal-Partit Laburista, il-partit li fdani, mhux biss bhala expert fl-ekonomija imma bhala briedem li jghid u jistqarr dak li tassew ihoss, bla habi u minghajr pregudizzju. Fuq kollox, il-Partit Laburista huwa mehtieg ghal Malta ghax minghajru u jekk ma jqumx wahda sew fuq riglejh, tbati s-sistema demokratika hawn Malta u mat-tigrif taghha jkollna herba ekonomika u socjali.

Wara t-telfa li garrab il-PL is-sena l-ohra, il-PN beda jahseb li jista' jaghmel li jrid fil-pajjiz. Huwa fatt sagrosant. Jafu kulhadd u ma jista' jichdu hadd. Jekk il-PL ma jsibx 1-ghajnuna tan-nies kollha ta' rieda tajba, pajjizna jitlaq b'girja wahda lejn id-dittatura. Jekk thares lejn l-imgieba ta' xi ministri tal-kabinett ta' Gonzi malajr tintebah x'qed nghid.

Insemmi ftit ezempji. F'Settembru li ghadda harget l-ahbar li 20,000 email passwords mis-server tal-gvern waqghu f'idejn nies li tqabbdu jisirquhom minn xi hadd li s'issa qed jahseb li mhux maghruf . Fost dawn kien hemm dawk tal-Pulizija, tal-Forzi Armata, tal-gudikatura u tal-parlamentari.

Il-Ministru responsabbli minn dal-qasam, l-Onorevoli Austin Gatt qara rapport fil-parlament li kkonferma li s-serqa sehhet b'success u damet ma nkixfet tliet xhur shah. X'sar minn dakinhar '1 hawn biex tissewwa dil-qaghda tal-biki? Ftit wara kellna incident iehor marbut ma' dit-teknologija. Is-segretarju generali tal-PN, Pawlu Borg Olivier baghat, bi zball, messagg elettroniku lis-segretarju tal-PL, li fih kien hemm xhieda cara u tonda ta' kif il-gvern ta' Gonzi jahdem b'mod mhux xieraq mal-PN bhala partit politiku. X'gara wara dan l-iskandlu? Ittiehed imqar l-icken pass biex tissewwa l-qaghda?

Li ghandna llum hija diskriminazzjoni sfaccata kontra nofs il-poplu, jigifieri dawk li ma vvutawx lil GonziPN u preferenzi daqstant iehor sfaccati favor dawk ta' gewwa nett. Saqsi lil min trid u tara jaqbilx mieghi. Din hija aghar mill-kazi l-ohrajn, ghax din m'hijiex kaz imma attitudni li tlewwen il-politika kollha u r-relazzjonijiet pubblici kollha tal-gvern. Aqra l-gurnali, ifli dak li jiktbu l-propagandisti ewlenin ta' GonziPN u tara b'liema mod degradanti jitkellmu dwar dawk li m'humiex maghrufin bhala segwaci ta' GonziPN. Kieku kienu qieghdin jiktbu dwar nies ta' razza differenti kienu jitqiesu bhala qieghdin jikkommettu reat razzist.

Il-htija ta’ din id-diskriminazzjoni klassista hija kollha tal-magna propagandista ta' GonziPN immexxija minn nies li lanqas biss kienu eletti mill-poplu u ghalhekk m'ghandhom l-ebda qima lejn is-sistema demokratika. lr-rwol tieghi fil-Partit Laburista hu li nghin biex din id-diskriminazzjoni tingheleb u pajjizna jerga' jibda jara d-demokrazija tahkem fl-oqsma kollha tal-hajja u tghin, kif taghmel dejjem fit-trawwim u t-tkabbir ekonomiku.

Jiena staghgibt kemm laqghuni l-laburisti, minn fuq s'isfel, malli saru jafu li jiena lqajt l-istedina li nohrog bhala kandidat ghall-elezzjoni Ewropea f'isem il-Partit Laburista.

Din il-laqgha sabiha li tawni jiena nfissirha bhala x-xewqa tal-laburisti li jharsu '1 quddiem b’tama li pajjizna ghadu ma tilifx kollox bhalma qieghdin ibassru xi osservaturi politici. B'rieda tajba nistghu nahdmu id f'id ghall-gid tal-pajjiz u tac-cittadini kollha bla distinzjoni u minghajr diskriminazzjoni.

Fl-istess hin, jekk il-laburisti ferhu bil-kandidatura tieghi, hekk ghamlu wkoll dawk kollha, mhux bilfors mill-kamp luburista, ghax jafuni bhala bniedem li jqieghed l-ewwel u qabel kollox il-moderazzjoni, il-komprensjoni, u l-gid tal-pajjiz kollu.

Ma nistaghgibx, izda l-ahhar fehma tinkwieta lill-propagandisti horox ta' GonziPN li mohhhom biss biex ipingu lill-Partit Laburista bhala wiehed maghmul minn qatta’ xjaten kif kien irnexxielhom ipinguh fl-imghoddi. Lil dawn ma nista' nghidilhom xejn ghajr li l-pajjiz mhux lilhom jehtieg imma lil min, b’serjeta’ u b’dedikazzjoni jahdem u jhabrek biex kemm jista' jkun malajr nohorgu mill-krizi ekonomika li ninsabu fiha. Bla dubju, mod kif ma nohorgux mill-krizi ekonomika jkun dak li noholqu aktar krizi socjali u politika biex innessuha u ma nhallux il-poplu jahseb fiha u jfittex lil min tabilhaqq jista’ jghinu jeghlibha.

www.edwardscicluna.com

The moderate face of Labour

2009-06-01T19:34:00.000+02:00

Malta Today on Sunday - Sun 24th May 2009

Economist, lecturer and widely respected independent pollster, EDWARD SCICLUNA surprised everyone by emerging as Labour’s frontrunner for the European elections. He talks about his reasons for entering politics, as well as Gonzi’s ‘disastrous’ handling of the economy.

For years, we have grown used to Professor Edward Scicluna making appearances on television to announce the general election result. Like the ‘Man from del Monte’, he would come on the screen with his clipboard and his deadpan voice, analysing the earliest samples and accurately predicting the election result.

"My predictions have clearly irked the Gonzi administration,” he tells me with a smile as he leafs through a small mountain of newspaper cuttings at his San Pawl Tat-Targa home. In one cartoon, the placid economics professor is even portrayed as Gonzi’s worst nightmare, pricking the Prime Minister’s conscience with reminders of a long overdue economic reform.

But while he has long been a keen critic of government economic policy, Prof. Scicluna only nailed his political colours to the mast after last year’s budget... when Finance Minister Tonio Fenech accused him of “leaning towards Labour”, for failing to share the government’s optimism for Malta’s economic future.

It was in a sense a self-fulfilling prophecy: but does he now regret his decision to contest the election? Hasn’t he just gone and thrown away a painstakingly constructed reputation for impartiality, which – let’s face it – he will probably never be able to reclaim?

“I would have preferred to remain independent, certainly,” he replies. “It’s more comfortable. I could have very easily carried on doing what I was doing before: conducting studies for the private sector, like the evaluation of EU funding I was commissioned to do by an auditing firm...”

So what made him go out for politics precisely now?

“After Labour’s third consecutive electoral defeat last March, I felt the democratic deficit was too significant to ignore,” he begins. “On the one hand you have the Nationalist party which is projecting the image of ‘party is king’. They act as though they own the country, and will be in government forever. On the other hand, there was an Opposition whose morale was rock-bottom, absolutely zilch...”

From this perspective, Scicluna argues that the difference between the two parties goes well beyond the demographic split that separated them in the last election.

“The 2,000 votes are immaterial really,” he says. “The truth is that one half of Malta’s political establishment had simply collapsed. This creates a dangerous imbalance, and you don’t have to look very far to see the consequences...”

To illustrate the gravity of the situation, Scicluna invites me to consider a global analogy. “When did the United States start behaving questionably and making mistakes... like, for example, the invasion of Iraq?” he asks. The answer, he claims, goes back to the collapse of the Soviet Union in 1989. “After one side collapsed, the other had free reign to do as it pleased...”

By inference, Scicluna suggests that after the collapse of the Labour Opposition in 2008, the Nationalist government no longer felt it was accountable to anyone, and started to behave in an almost dictatorial, uncompromising fashion that – according to Prof. Scicluna – is now becoming dangerous.

He lists out a number of recent “incidents” that helped consolidate his impression.

“The first was the gov.mt issue,” he begins: alluding to the revelation last September that 20,000 email passwords had been stolen from the government server, allowing the hackers access to highly sensitive email accounts throughout public administration, including the Malta Police Force, the Armed Forces, the judiciary and parliament.

IT minister Austin Gatt himself later read out a report in parliament which confirmed that the theft had been successful, and that the passwords had been accessed by unauthorised persons for as long as three whole months before the breach had been discovered.

“It’s astounding,” Scicluna continues. “We forget so easily... things which are fundamental to the basic running of the State. How can we ignore something so serious? How can we pretend that nothing happened? And yet, to this very day, nothing has been done about it...”

The second incident – revealed when PN general secretary Paul Borg Olivier accidentally sent his Labour Party counterpart a confidential email – involved the extent of the incestuous relationship that now clearly exists between the government and the Nationalist Party.

“What emerged from that email was that officials from OPM held a meeting with PN officials at the Stamperija in Pieta’,” he explains. “How can you have government officials dancing like that into the PN headquarters to pass on sensitive information about private citizens? It’s scandalous. But what happened as a result? Absolutely nothing...”

The third issue is not so much a single event, but rather an entire attitude that has been allowed to spiral out of control in recent years, to the extent that even committed Nationalist supporters are starting to worry about it. Prof. Edward Scicluna, like many others outside the PN’s inner sanctum, is increasingly appalled at the levels of blind prejudice currently being displayed towards non-Nationalist politicians and sympathisers.

“People who support Labour are talked about almost as though they are a separate species: sub-humans, second-class citizens, ‘hamalli’...” he comments with distaste. “The language currently being used to describe Laburisti is a disgrace. If it were directed at people because of their skin colour or religion, it would be considered illegal. How can an entire category of people be disparaged like that? This is half the country’s population we are talking about here...”

Prof. Scicluna explains that on his home visits, he meets Nationalist supporters who tell him they are ashamed of this sort of thing.

“I know it’s a hackneyed and overused word, but this is arrogance, plain and simple,” he continues. “Faced with all this, I felt I had to do something. I couldn’t simply stand by and watch the country degenerate like this...”

And yet, this represents a curious reversal of roles from the situation many of us remember in the 1970s and 1980s. Back then it was the Labour party that had been in power for what felt like forever... and it was the Nationalists who bore the full brunt of discrimination and prejudice.

I ask Edward Scicluna if he feels the Labour Party might be directly responsible for its current predicament. After all, isn’t it payback time for the Nationalists after the humiliations of yesteryear? And couldn’t it be argued that the Labour Party made itself unelectable, simply because of the memory of those years?

Edward Scicluna acknowledges the point, but counters that the PN propaganda machine has blown it out of proportion for its own advantage.

“Were it not for the PN, Labour would already have put all that behind,” he says, reminding me how Joseph Muscat has already made overtures to the victims of Labour violence in the 1980s. “But at the same time, the Labour Party grassroots are unwilling to let go of the image they have of their party back then. They still have their pride. They don’t want to throw out the baby with the bathwater... a lot of good was done in those years, and they are justifiably proud of that...”

Ironically, though, his own popularity within the party appears to also signify a change in Labour. I ask Prof. Scicluna if he was as surprised as I to discover that independent polls place him ahead of incumbent MEPs and other party stalwarts. After all, he is hardly a typical ‘Laburist’, at least in the way a typical Nationalist would reason...

“I believe my candidature appeals to a lot of ordinary people who want moderation in politics. I get that sort of feedback from Nationalists too.”

Scicluna also freely admits that the party had to change, not just for the sake of reassuring frightened Nationalist voters, but also for the good of the country’s political balance.

“If we are to have a two-party system, I would like to see two well-prepared parties: two parties that can assume power, without disruption or upheaval. Two parties that can be trusted to administer the country...”

Labour, no doubt, believes it is now ready to govern under Muscat. In order to do so, however, it will still have to reach out across the political divide and convince at least a small proportion of Nationalists that it can be trusted. But has it reached that stage yet? Has Muscat’s earthquake of change shaken the political establishment enough to make Labour electable?There is a tiny moment of silence. “More work needs to be done,” he admits at length. “But it has already started. This is what the think tanks were all about. You can argue that the change has not to date been far reaching enough – personally I suspect that the MEP election itself got in the way, and that we will see considerably more change after June 7 – but the Labour Party has undertaken to build a new platform on a wide variety of policy issues...”

Do you think your own candidature is part of a strategy to make the Labour Party ‘less scary’ to Nationalist voters?“Yes, definitely,” Scicluna replies without a second’s hesitation. “It is also partly why I contested in the first place. I want to change the way people look at the Labour Party. Look at how Britain’s Tony Blair managed to reinvent ‘New Labour’ in the 1990s. He turned it around from a militant, old-fashioned institution to a more business-friendly political party. There is a tendency to think that, being a workers’ party, Labour will always look negatively at business. But this is not true today... it is perfectly possible to champion worker’s rights, while also acknowledging that jobs are created by the private sector...”

But Edward Scicluna also argues that in today’s economy, Maltese businesses have a good deal more to worry about than the mere prospect of a Labour administration.

“We have never had the economy so badly mismanaged as the last 10 years,” he says, with a bluntness that takes me by surprise. “Prime Minister Lawrence Gonzi forgot the economy when he took over the finance minister’s portfolio in 2004. The EU told him to concentrate on deficit reduction, and that’s all he did. He forgot everything else. Words like ‘economic growth’ and ‘divergence’ were simply not in his vocabulary...”

Scicluna insists that from a restructuring perspective, deficit reduction is useless on its own. “Cutting the deficit? We can do it,” he says with a shrug. “It’s easy: the IMF provides a blueprint for it how can be done, by decreasing expenditure without raising taxation. But what was needed was the restructuring of our economy. That, by way of contrast, is not easy at all. It is hard and painful. But it can’t be avoided. The longer you postpone it, the more painful it will be.”

Scicluna shows me a series of graphs to illustrate what he refers to as the government’s “disastrous” handling of the economy. One of these graphs, representing the deficit curve over the past five years, resembles an almost perfect boomerang.“Here you can see the deficit as it stood in 2004, at 4.7%. Then it was reduced gradually over the next two years... only to grow again by the last quarter of 2008 to reach 4.7%.”

For Scicluna, this was the inevitable result of bad economic management, and points out a whole raft of questionable measures to account for it. “Instead of emulating other countries like Sweden, the USA, etc., government took the easy way out and increased VAT to 18%. It negotiated a five-year collective agreement with UHM, providing for an immediate (nominal) wage increase, and promising further wages increases over the next five years. This was just before 2008, when we joined the Eurozone...”

And then, the election came along. “In the 2008 budget, government voted enough expenditure to win the election. They covered their tracks by estimating revenue increases of almost €200 million. But even at the time, as an economist I asked: what if those increases do not materialise? And sure enough, they never did. We have now come full circle: the deficit is back to 2004 levels, the EU is now initiating infringement procedures against Malta. How can anyone call this good economic management?”

Still, while Scicluna is scathing about the Gonzi’s administration’s economic skills, it remains debatable whether a Labour government will heed his own advice, and embark on the necessary reforms: which include a revision of the university stipend system, and also control of expenditure on public health. What does Edward Scicluna recommend for a political hot potato like stipends?

“It would be very presumptuous of me to say that we should ‘do away’ with stipends,” he replies cautiously. “But even a recent European Commission document suggests that they are a burden on the system. But these are things the taxpayer has to decide. Does the taxpayer want to keep subsidising university students? If not, there are a number of ways the system can be revised. They could be converted to loans, or grants, or part-loans, part-grants... it’s not up to me to decide how to reform the system.”

However, Scicluna argues the biggest haemorrhage is not stipends but government wastage and inefficiency... referring to the recent scandal involving the issue of direct orders at Mater Dei hospital. “It gives a bad example throughout the economy,” he says. “These are basic issues of accountability and transparency. They affect the entire country.”

And yet, while Scicluna presents convincing economic arguments (to a layman’s ears, at any rate), the level of debate in the country appears to be more concerned with how Labour candidates voted in the last European election in 2004. Unprompted, he takes the opportunity to smash the PN’s current – albeit somewhat outdated – witch-hunt for closet Euro-sceptics within the Labour fold.

“I will not reveal how I voted in the 2004 referendum,” he asserts emphatically. “But only for one reason: to show how utterly irrelevant this argument has become. I have gone on record on countless occasions to say that EU membership would be beneficial to the economy. I was interviewed in November 1996 – two months after Labour won the election – and went on record saying that the Labour party would eventually come round to accepting EU membership... and I have been proved right on this, too. But why grace the question with an answer? It is an irrelevance, nothing more, nothing less.”

Prof. Scicluna will be contesting the European Parliament elections on behalf of the Labour Party.

www.edwardscicluna.com

Is restarting the Excessive Deficit Procedure justified?

2009-05-19T22:52:00.000+02:00

Business Today - Wednesday, 13 May 2009

The European Commission last Monday 4th May 2009 confirmed that it was going to restart the Excessive Deficit Procedures against Malta for its high Budget deficit in 2008, which reached 4.7 per cent for last year, 1.7 per cent in excess of the EU’s budget deficit limit under the Stability and Growth Pact. Business Today’s CHARLOT ZAHRA spoke to Labour candidate for the European Parliament elections Edward Scicluna on the significance of this procedure, what effective measures the government should take in order in order to curb this deficit, and the different forecasts issued by the different financial institutions in Malta, among other things.

What is your reaction to the Excessive Deficit Procedure Deficit against Malta? Do you think that it is justified in view of the high budget deficit reached by Malta last year?

What was surprising was not the Excessive Deficit Procedure which was slapped on us this time, but the strange decision that we were let off scot-free some weeks back because the EU believed our government, that the reported deficit was a one-off. Any local or foreign economist familiar with our economy could see that this was not so. We are now among the three laggards in the Euro zone. Definitely it is not a situation to write home about.

In your view, what concrete action should the Government take to curb the budget deficit that Malta has incurred last year and likely to incur this year as well?

It all started in October 2007 when Government budgeted an unprecedented revenue forecast unrelated to the expected outcome of the economy. It was clear to me that if this revenue forecast would not materialise, our public finances would revert back to an over 3 per cent deficit/GDP ratio. I am getting annoyed that what could be evaluated using a back of the envelope calculation was not caught on the EU radar screen with their sophisticated economic models. But then I am not yet sure they are taking us seriously. Or else we are misreading their style of evaluation. It looks that each time they just want to call our bluff and when we are caught in our own trap, they pounce. For our own good I just wish they would act much earlier. For the government, local economists are a bunch of gloomers and doomers. The EU can afford to be neither. But when the government transgresses the EU rules, we still have to see how they would look like.

In view of the fact that the European Commission is now saying that the GDP for 2009 will actually shrink by 0.9 per cent and that budget deficit for 2009 will reach 3.6 per cent, do you think that Finance Minister Tonio Fenech is still able to reach the targets set out in the 2009 Budget of 2.4 per cent growth rate and 1.65 per cent budget deficit rate for 2009? How?

This woolly and opaque way of reporting and forecasting must stop. It is an insult to the intelligence of all Maltese and Gozitans living on this island. How can we state with a straight face we have an international financial centre on the island and then let this fireworks of meaningless economic and financial figures be allowed to be banded about as if it is business as usual. The three public agencies must get their act together. I am referring to the NSO, the CBM and the Ministry of Finance. I am more than sure they can do it. I know they have qualified people. Their data must converge to the EU’s own estimates and forecasts. It does not necessarily need to be a replica but some convergence is required. It is quite disquieting that it is not.

What is your reaction to the latest economic forecast announced by the European Commission on Monday, especially with regards to the forecast for GDP contraction in 2009 and a budget deficit of 3.6 per cent for this year?

I think that the Government has never to date been in such a difficult situation with regard to the economic management of our economy. You have to either inflate or deflate. Either way, in our situation Government will have to pay a very high price whichever way it goes. Unfortunately it painted itself in a corner with no exit in sight. It cannot say it was not forewarned.

Prof. Scicluna will be contesting the European Parliament elections on behalf of the Labour Party.

www.edwardscicluna.com

Employment predictions

2009-05-12T13:16:00.001+02:00

by Prof. Edward Scicluna, Malta Today on Sunday - Sun 10th May 2009

There is no doubt that Mr Vince Farrugia attempted to attack my economic and statistical credibility when he tried to misrepresent the results of my model regarding the employment implications of a fall in our exports. He said and I quote: “With a 20% drop in exports according to his predictions we should by now have already suffered 15,000 job losses. The country would have been in a state of panic were his prediction to have come through.”

The results of my model were presented during a GRTU conference given last 16 December in the presence of the Prime Minister. Mr Farrugia was surely not paying attention to the mathematical caveats appearing on the same slide of the powerpoint presentation (PPP), which I included with regards to this multiplier. I did say that: A 2% annual fall was a simulation exercise of an across the board fall in all export-oriented industries including tourism. If this were to happen this would translate into an over 1,000 full-time equivalent job losses directly and half as much again indirectly. Furthermore this Leontief model is estimated for a given year and so the ratio of full-time equivalent jobs is to nominal value of exports in a given year.

The slide also said that the labour-intensive industries such as tourism, transportation and recreational and similar services are affected more, while the more capital intensive industries are expected to have a much lower employment multiplier effect than the estimated average of 1,000 persons.

Mr Farrugia ought to know that up to the end of 2008, according to the NSO national accounts statistics and as confirmed by Eurostat the percent fall in nominal exports of goods and services was of 5.6% and not of 20% as wrongly stated by Mr Farrugia. Furthermore the industry mostly affected was manufacturing and in particular ST Microelectronics and similar highly capitalized industries, which according to my model have a multiplier much lower than 1,000.

If he applied these obvious observations he would predict that the employment loss expected over the long run for the reported fall in exports would be more in the region of 2,000 direct and 1,000 indirect rather than the 15,000 exaggeration implied by Mr Farrugia.

Where shall we look for these expected 3,000 full-time equivalent lost jobs. Surely not just in the unemployment register. Unemployed persons according to Eurostat comprise employable persons who are without work during the reference week, are available to start work within the next two weeks, and have been actively seeking work in the past four weeks. Data are presented in seasonally adjusted form. Eurostat reports that between September of last year and March of this year there was a 1,500 increase in persons unemployed.

Where are the other 1,500 predicted by the model? Mr Vince Farrugia should know that full-time equivalent jobs are not persons but man-hours lost divided by 40 hours of work a week. This includes all overtime work and part-time work which has now been terminated. It includes jobs which were terminated by some early retirement scheme or other. It includes workers working on a four-day week which amount to over 2,000 in the formal sector and much more among the GRTU self-employed members who are finding themselves on a less than a four-day week. It includes workers in a number of companies with whom government has reached an agreement to retain workers and or revert to a five-day week (ST, etc). Taking all these working hours lost together we would be fair to translate these into at least another 1,000 full-time equivalent persons unemployed.

These total figures fall short of the 3,000 full-time equivalent predicted by the model and leave a balance of about 500. But everybody knows that next month and the in following ones unemployment is expected to rise further. The reason being that unemployment is a lag not a lead indicator. It takes many months of loss of sales during which first it will be profits that are eaten away. Only after that would employers resort to the unfortunate shedding of their staff. During the last three months of 2008, firms saw a fall of about €65 million in their profits. With that money they would have paid for 6,000 jobs.

I do hope that we get serious with statistics. I cannot understand why persons who enter politics should pretend they have a licence to start playing around with figures. I can assure the reader that whether in politics or out of it, I will never betray my academic training by using statistics frivolously.

Prof. Scicluna will be contesting the European Parliament elections on behalf of the Labour Party.

www.edwardscicluna.com

Gozo needs a generous Public Service Contract

2009-05-10T18:16:00.000+02:00

Gozo needs a generous Public Service Contract in a soon-to-be liberalised inter-island transport sector

For every one million Euro reduction in fares charged by Gozo Channel, Gozo's economy gains about five to seven million Euro in visitor spending, which would mean two to three million Euro in additional wages and profits.

This was revealed by Professor Edward Scicluna, Labour Party candidate for the MEP Elections while addressing a conference "Vision for the Development of the Island Region of Gozo" organised today by the Gozo Business Chamber.

The grounds for a generous public service obligation (PSO) are economic and not just social, Prof. Scicluna argued in his speech.

This could be arranged through a public service contract (PSC) even in a liberalised transport sector between the two islands. However, this contract must not discriminate between community ship owners, according to the PL candidate.

Professor Scicluna said that the time has come for the setting up of a Gozo Enterprise with a strong business promotion policy and programme covering high value added manufacturing, niche tourism and back office administration.

"Gozo needs special EU funding no less than other Island Regions in the European Union. Although the government seems to have missed the boat for the 2007-2013 budgetary period contrary to what had been promised, a socio-economic study needs to be carried out with urgency in consultation with all Gozitan stakeholders including the Gozo Business Chamber, the Gozo Tourism Association, the NGOs Association, the Church in Gozo and the Gozitan local councils, to establish the real needs of Gozo," Prof. Scicluna said.

Rather than empty slogans of eco-island, the island of Gozo needs sustainable development, Prof. Scicluna concluded.

Intaxxati bil-moħbi

2009-04-18T17:17:00.000+02:00

minn Edward Scicluna, Kandidat tal-PL ghall-elezzjonijiet tal-Parlament Ewropew

l-orizzont - It-Tlieta 14 ta' April 2009

Kulħadd jaċċetta li kull Gvern irid jintaxxa biex ikollu x’jonfoq fuq is-servizzi pubbliċi. Però għal kol lox hemm limitu. U dan japplika għat-taxxi wkoll. Mhux l-ewwel darba fl-istorja nisim għu b’rew wixti meta l-pajjiż iħoss li m'għan dux iħallas iżjed milli jmissu. It-tbatija, riżultat tal-piż tat-taxxa, tkun tant kbira li l-pop lu ma jkunx jiflaħ għaliha aktar.

Dan il-gvernijiet jafuh. Biex iżidu d-dħul tagħhom b’mod si ni fikattiv dawn iridu bilfors idaħ ħlu xi taxxa ġdida, jew inkel la jgħollu r-rata ta’ taxxa li teżisti diġà. Hekk pereżempju ġara me ta ddaħħlet it-taxxa tal-VAT, kif ukoll meta din għolietilha r-rata minn 15 għal 18 fil-mija.

U għalhekk il-Gvern jipprova skemi biex dan il-piż jiżdied kemm jista’ jkun mingħajr ma jinduna l-poplu. Irridu ngħidu li l-ekonomija tkejjel dan il-piż bħa la l-proporzjon tad-dħul naz zjonali li jinġabar f’taxxi. Sintendi anke jekk ma jitkejjilx il-piż ħafna drabi jinħass sew. It-taxxi ma jagħmlux il-Gvern popolari u għalhekk f’dan ir-rigward jekk jirnexxielu, huwa jipprova jaħbi idu.

Fil-każ tal-Gvern Malti huwa ċar li hekk qed jiġri.

Nieħdu l-ewwel mod. Kull sena minħabba l-għoli tal-prezzijiet, min iħaddem iżid il-pagi tal-ħaddiema biex dawn ilaħħqu mal-ħajja. Dan id-dħul m'huwiex reali għax fejn konna bqajna. Bi dħul miżjud b’ħamsa fil-mija biex tlaħħaq mal-ħajja li tkun għoliet b’ħamsa fil-mija ma tkun għamilt l-ebda gwadann.

Mhux hekk għall-Gvern. Kontra dak li jsir f’ħafna pajjiżi oħra tal-Unjoni Ewropea, il-Gvern Malti ma jgħollix ’il fuq awtomatikament is-'ceiling' ta’ kull 'income tax bracket'. Għal hekk il-ħaddiem Malti jispiċċa jaqbeż is-'ceiling' u jibda jħallas iżjed taxxa mis-sena ta’ qabel.

Għaliex għandhom ħaddiema jispiċċaw iħallsu iżjed 'income tax' jekk ikunu baqgħu kif kienu s-sena ta’ qabel? Huwa għalhekk li f’ħafna pajjiżi din it-taxxa moħbija mhix permessa u l-'bra ckets' jew 'ceilings' huma awto ma tikament aġġustati kull sena, f’sistema msejħa “index-linked”.

Tant hawn Maltin li ma jafux b’din it-taxxa moħbija li meta kultant dan it-'tax bracket' jiġi rranġat, kulħadd jaħseb li dan hu xi att karitatevoli tal-Gvern li qed jaqta’ t-taxxa. Dan ġara dan l-aħħar. Sew qabel u sew wara l-elezzjoni ta’ sena ilu. Li jkun biss ġara hu li l-Gvern ikun radd lura xi ftit mit-taxxi li jkun ħa hu stess bil-moħbi fis-snin ta’ qabel.

Iżda dan l-aħħar il-Gvern qed juża metodi ġodda kif iżid it-taxxi bil-moħbi jew kif jgħidu bl-Ingliż, “by sleight of hand”. F’ħakka ta’ għajn mingħajr ma tinduna jkun għolla l-piż tat-taxxi. Dan hu permezz taż-żieda ta’ tariffi monopolisitiċi wara t-tneħħija ta’ xi sussidji li kien hemm fuq dak is-servizz. Dan jinkludi iż-żieda fit-tariffa tal-gass fl-ewwel ta’ April, iż-żieda fil-kontijiet tad-dawl u l-ilma mill-ewwel ta’ Ottubru li għadda u ż-żieda mħabbra, iżda mhux attwata s’issa, fis-servizz tad-drenaġġ. X’qiegħed jiġri hawn?

Qabel ma nwieġeb din il-mistoqsija importanti rrid inkun ċar biex ma niġix ikkritikat li bħala ekonomista ninstema' li ma nemminx fil-liberalizzaz zjoni tas-swieq. Mhux qed ngħid li ċertu sussidji m’huwiex tajjeb li jitneħħew biex is-servizz jirrifletti kemm jiswielna biex nipproduċuh u biex inqassmuh. Dan japplika għall-gass, id-dawl u l-ilma u d-drenaġġ.

Però din il-politika tas-suq m'għandiex tintuża mill-Gvern biex jgħolli l-piż tat-taxxi minn wara dahar il-poplu. Kif fil-fatt qed jiġri. Ħalli nfiehem aħjar.

Lejlet li għola l-prezz taċ-ċilin dri tal-gass, l-ispejjeż tal-produz zjoni u distribuzzjoni kienu qed jitħallsu minn żewġ sorsi. Parti mill-konsumatur permezz tal-prezz issussidjat u parti mit-taxxi tagħna li kienu qed imorru biex jitħallas is-sussidju li l-Gvern kien jgħaddi lil Enemalta.

X’ġara sew fl-1 ta’ April? Il-konsumatur ġie mitlub iħallas 37% tal-prezz ta’ qabel iżjed biex is-sussidju fuq il-gass jonqos sew. B’hekk jippermetti li l-Gvern ma jibqax iħallas il-'public service obligation' li fil-passat parti minnha kienet tmur għas-sussidju tal-gass.

Mela filwaqt li l-ħaddiem Malti ntalab iżid il-kontribuzzjoni tiegħu permezz tal-prezz, l-istess ħaddiem ma ngħatax lura u lanqas ġie kkumpensat għall-fatt li issa m'għandux bżonn jikkontribwixxi mit-taxxi tiegħu għas-sussidju li issa se jitneħħa jew jonqos. Mela dan il-gwadann jekk ma ħadux min iħallas it-taxxa minn ħadu? Qtajtu sew. Id-differenza żamma l-Gvern Malti. Dan it-'trick' magħmul f’ħakka t’għajn se jippermetti l-Gvern idaħħal aktar taxxi, tant li se jgħolli l-piż tat-taxxa fil-pajjiż. Dan ġara wkoll fil-każ tad-dawl u ilma, fil-każ tal-gass u dalwaqt fil-każ tas-servizzi tad-drenaġġ.

Fir-rapport ta’ stabbilità u konverġenza li l-Gvern Malti għadda lill-Kummissjoni Ewropea f’Diċembru li għadda huwa wiegħed li se jżid il-piż tat-taxxi (b’parti ta’ perċentwal tal-GDP) matul din is-sena li qegħdin fiha. Ħafna skantaw kif dan jista’ jsir. Qalu li żgur din is-sena l-Gvern mhux se jazzarda jdaħħal taxxi ġodda jew jgħolli r-rati ta’ taxxi li jeżistu. Dan veru, iżda bħalma rajna hawn fuq, il-Gvern għandu modi oħra kif jintaxxana iżjed, anke bil-moħbi. U allura l-wegħda tal-Gvern lill-Kummissjoni Ewropea ma kienet żball xejn.

www.edwardscicluna.com

Could interest rates in the Euro area go any lower?

2009-04-11T19:14:00.000+02:00

Last Thursday, the European Central Bank (ECB) cut interest by 0.25 per cent to 1.25 per cent, falling short of analysts’ expectations of another 0.5 per cent rate cut. Business Today spoke to economic analyst – Labour candidate for EP elections and economist Edward Scicluna, about the ECB’s latest decision, the issue of non-standard measures and whether Maltese banks should cut their interest rates after the latest ECB cut, among other things. Report by CHARLOT ZAHRA

Edward Scicluna : “Too little too late”

What is your opinion about the ECB’s decision to cut interest rates at a historic low of 1.25 per cent?

Too little too late. The ECB does what some other Central Banks would have done with a bolder cut a month earlier. The overly conservative attitude of the ECB is now well established.What, do you think, led the ECB to exercise caution with cutting the interest rate this time around despite the worsening of the economic crisis in the euro area, especially the inflation figures? The ECB is more reluctant than the Federal Reserve to start using what it refers to as “non-standard” measures to support the Euro zone economy.The tiny and sparse cuts in the interest rates prove that the ECB wanted to take its time before reaching this unorthodox stage, which every central banker dreads.Resorting to quantitative easing and direct printing of money is not a light decision to take. It is still uncharted waters.

ECB Governor Jean-Claude Trichet reiterated his warning of using “non-standard” measures to support the Euro zone economy, saying that the ECB would be discussing the matter next month. Do think that the time is now ripe for non-standard economic measures or not? Why?

Quantitative easing is the term we use which a Central Bank may use in such an eventuality. It is similar to a tourniquet used in first aid; it may stop the haemorrhage but creates dangerous side effects.The printing of money sends shivers down the spine of any central banker. Can you imagine the European Central Bank getting to that stage in a country like Germany – where hyperinflation is likened to a volcano exploding in the middle of the town? Memories are hard to be forgotten.On the other hand, the downward risks are still there in spite of seeming observations of traces of an economic uplift on the horizon. Economic activity and asset prices are falling at a lesser rate.But one still needs to use all the monetary and fiscal instruments at one’s disposal to stop this dangerous beast. The 1930s devastation happened only 80 years ago.The stages being reached are still very similar. That’s why it is so scary. The G20 meeting has to be seen in this perspective.

Last month, Maltese banks did not pass on the full interest rate cut to clients, claiming that they wanted to protect depositors. In view of the current crisis facing the Maltese economy, do you agree with the banks’ approach? Why?

The fall in the central interest rates have stopped being effective because the banks are no longer responding in sympathy. Today’s banks are upping their rates rather than lowering them.The reason is simple to understand. Interest rates include a risk element. That risk element is increasing and the cautious and correct banks want to reflect it in their lending rates.And that is why soon the Central Banks have to do what the Japanese did in their decade long recession – quantitative easing.

In your view, should they now pass the full interest rate cut to their consumers, especially since the rate cut is smaller?

Governments may use cajoling, suasion and similar methods to get banks to respond to ECB rate changes. But there is a limit to what they can do.

Taxation by stealth

2009-04-08T12:52:00.000+02:00

by Prof. Edward Scicluna

The Times of Malta - Wed 8th April 2009

We define a tax burden as the ratio of revenue from taxation to the country's national income as measured by the GDP. This ratio varies over time and from country to country. What is definite about it is that, as the tax burden increases so does the pinch on one's pocket.

Most of the time this tax burden can come about either by increasing a current tax rate, as has been the case with VAT, which was raised from 15 per cent to 18 per cent, or by introducing a brand new tax. The third way of increasing the tax burden, which is the subject of this contribution, is by stealth. Governments the world over have sneaky ways whereby revenues can be increased to such an extent that they push up the tax burden and this without the full knowledge of the taxpayer.

I am not here referring to tax buoyancy. That is the quality of intelligently-designed taxes that can keep their due revenues growing at the same rate that the economy is expanding, if not more. Income tax and VAT fulfil this prerequisite. They can look after themselves and are able to fill the public coffers as the economy's growth manages to surge forward. For many that is understandable and find no objection. But for sneaky ways?

The first sneaky way to increase the tax burden is by avoiding to inflation-proof the country's income tax. Most advanced countries are not allowed to use this form of hidden taxation. We all know that inflation, even if it were compensated by appropriate wage increases, such as with our local Cola arrangement, does nothing to add to our standard of living. So why should we pay income tax on our Cola and additional inflation-related wage and salary increases? Up to now the Maltese government has not put into place a system whereby each year the tax thresholds are increased automatically (index-linked) to account for nominal wage increases that do not add anything to the real take-home pay.

Many tax payers do not perceive the effects of this nominal fiscal drag. The government knows this. So it may prefer to adjust tax brackets manually once every few years. What in effect is simply the restoring of real tax rates to their approximate pre-inflation levels appears to be a benevolent act of the government looking as if it is cutting taxes. Not surprisingly, such changes are usually made right before a general election or after, in fulfilment of a pre-election promise.

The latest weapon to be used by the government to increase the tax burden by stealth is the increase of public monopoly tariffs following the removal of a government subsidy. This has been observed with tariff increases of electricity and water last October, the price hike of gas as of April 1 and the soon-to-be introduced drainage tariff.

Let us be clear about the argument. One could make a good case for the introduction of earmarked tariffs for specific services such as water or drainage facilities to ensure the recovery of their cost. One may also make a similar good case for the removal of subsidies on certain services such as energy, water, gas and other public utilities to reflect their true cost to society.

However, one should not use this change of policy to increase the tax burden by stealth. Let me explain. Take the price hike on gas cylinders. On the eve of the price hike, the production and distribution of gas on the island was paid for in two ways. One was paid directly by the consumer, admittedly at a relatively low price. The other was paid for, indirectly, by the taxpayer who ultimately finances the subsidy paid by the government to Enemalta to keep the price of a gas cylinder lower that the market would demand.

What has changed on April 1? The consumer has been asked to shoulder a price hike, which permits the government to reduce its previous public service obligation subsidising the price of gas. So while the Maltese, with a consumer hat on, has been asked to make a higher contribution, he or she, this time wearing the tax payer hat, has not been compensated for the saving made on the reduced subsidy. The government has pocketed the difference. The same sneaky tax deal has occurred with water and electricity and soon would be applied to drainage services.

If one had any doubt as to how the Maltese government has promised the EU, in its latest stability and convergence report, that the tax burden for Malta was to increase without the introduction of new taxes or the raising of current tax rates, now one knows how this is done.

Prof. Scicluna will be contesting the European Parliament elections on behalf of the Labour Party.

www.edwardscicluna.com

The 'big R' has arrived

2009-04-05T09:25:00.000+02:00

The economy went into a recession during the second half of 2008, confirming the widespread feeling that Malta was not going to remain unscathed by the "big R".

Economic growth for the whole of 2008 reached 1.6 per cent, which, although positive, was still two percentage points lower than the previous year and half of what the government was forecasting in the budget. Figures released by the National Statistics Office last Wednesday confirmed that last year the economy contracted in real terms in the third and fourth quarters after registering growth in the first half of the year.

Eurostat defines a recession as two successive negative quarter-on-quarter changes in constant-price GDP. The seasonally-adjusted data for last year, which made it possible to compare one quarter with the preceding one, showed that the economy contracted by 0.3 per cent in Q3 and a further one per cent in Q4.

Reacting to the news, economist and Labour MEP hopeful Edward Scicluna said he was amazed that the government's economists did not get wind of the GDP data for the third quarter when drawing up the budget last year. "The budget predictions were always looking too optimistic and the latest data confirms what some economists, including myself, had been warning," Prof. Scicluna said.

A more shocking revelation for economist Karm Farrugia was the data for gross fixed capital formation, which measures public and private investment in the economy. "Gross fixed capital formation contracted by more than 14 per cent year-on-year. This is serious because capital investment is what pumps up an economy. It transpires that the government was not aware of the circumstances that suggested we could be heading into a recession and insisted on reducing its capital investment programme. "Unfortunately, people like myself were described as prophets of doom," Mr Farrugia said.

Although Malta has not seen negative economic growth in years, economic analyst John Cassar White said it was not surprising considering the prevailing global recession. Mr Cassar White stressed that the most important figure to be worried about was the yearly growth rate, which for last year, although lower than predicted, was still positive. The NSO statistics show that GDP topped €5.7 billion in 2008. Growth in value added was generated in the transport, storage and communications sectors, financial intermediation, real estate, renting, business activities, public administration, education and health. There were also increases in wholesale and retail trade, quarrying and construction. Drops in value added were seen in agriculture, fishing, manufacturing, particularly of electrical and optical equipment, electricity, gas and water supply and hotels and restaurants.

The Times of Malta, Friday 13th March 2009 by Kurt Sansone and Christian Peregin

Net gainers or net donors

2009-04-04T13:32:00.000+02:00

Times of Malta, Friday 20th March 2009 by Prof. Edward Scicluna

The interview with EU Commissioner Dalia Grybauskaite which appeared in The Times last Tuesday misses the whole point at issue. It gives the impression that what matters mostly to the Maltese now is whether it was the Permanent Representative to Brussels, Richard Cachia Caruana or Labour leader Joseph Muscat who was right by a whiff of a few million euros either way, making us marginally net gainers or net donors vis-à-vis the EU.

Let us put the record straight.

As a member of the EU, Malta is gaining significantly in the environmental, social and economic fields through the various standards being imposed on our policy makers and operators, for example with respect to liquid and solid waste management, fiscal discipline and better legislation throughout. This is affecting positively our health, our standard of living and our various rights. It must be said that this would have been more positive had the government not dragged its feet with respect to various directives, besides the infringement this is giving rise to. Furthermore, a better negotiated treaty for various sections of the population would also have meant less suffering and less broken promises.

Coming to the financial package we recall the €855 million obtained for the 2007-13 budget period and how this was promised to revamp our economy. Nothing was said then about what were our dues, our EU membership fee, for that same period, and which we now roughly estimate to take about half that amount back to the EU.

Emphasis is also being made on the fact that we were record spenders with regard to pre-accession and transition facility funding. Agreed. But these were monies spent mostly on civil servants to train abroad (air fares, accommodation and fees) and twinning programmes with EU partner countries that provided, against payment, the training and consultancy on the island. Not so difficult to spend these monies.

The question here to ask is not whether we spent most of the money (mostly in foreign countries) but what benefits did we obtain from them. The various evaluation reports, including those carried out with the participation of the undersigned, might be seen on the web and can be judged on their own merits.

The problem with the 2007-13 Structural and Cohesion Funds is that they entail the planning, approval, building and completion of major projects. Various urban waste water treatment plants, waste recycling plants, incinerators, roads etc. It is an admitted fact that our Administration cannot cope adequately with these projects and, as a result, we are very late on most projects and risk losing funds if not completed in the agreed periods. So much so that, even according to the table provided by the EU Ambassador himself, in 2008 Malta finished a net gainer from the EU by some €5 million. Big deal!

To try to drag the Commission to underline that Malta need not be a net contributor is babyish at best. Of course, we know that these monies are due to us and perhaps they might not be lost to us. But can you imagine if a patient is given only half the medicinal dose due to him/her on two consecutive days in the comfort that the medicine will be alright in the fridge? Malta today is that patient. It needs its planned investment in full today.

Using half the amount over two consecutive years is no help to the economy. The EU has even allowed us to dip into the 2010 budget to help ride the recession. Keeping the funds for the future will not do us any good.

EC ‘too naïve’ to believe Malta’s fiscal deficit was a one-off

2009-04-04T13:26:00.000+02:00

Business Today - Wednesday, 04 March 2009

Senior economist and Labour candidate for the European Parliament (EP) elections Edward Scicluna said that with its assessment of Malta’s Stability Programme for 2009, “once and for all the EU has clarified a point which I felt was being misunderstood by many local economic observers. “This refers to the quick conclusion reached, that while the impending recession necessitates some form of economic stimulus, and that since the EU Commission itself was encouraging many EU countries to initiate such a stimulus, Malta would be allowed to exceed the three per cent deficit,” Scicluna explained. “This, I had emphasised, applied only to countries which had enough room to manoeuvre. Surplus countries like the UK and Germany were given the go-ahead,” he said. “But an excessive deficit procedure was slapped on all those who have exceeded the three per cent limit.”

Asked whether he agreed with the European Commission’s assessment on Malta, Scicluna said: “Where I disagree is the politics played by the Commission vis-a-vis Malta. “I cannot believe the Commission is so naive as to believe that Malta can actually fall in line in a short while in view that our excessive deficit was merely due to a one-off fiscal slip,” Scicluna insisted. “Of course it could well be that the Commission is playing a game, calling Malta’s bluff that it would correct its excessive deficit in a few months,” he added.

Scicluna said that he agreed with the EC’s assessment “that the risks of Malta delivering on any of its promises are high. I would go one step further and state it is nearly impossible to deliver such promises at this stage of our economic cycle.” On the other hand, Scicluna disagreed with the European Commission asking Malta to lower its expenditure in the health sector as proposed in the EC’s assessment.

“With Malta experiencing a record fall in exports throughout 2008, and the ramifications on future employment outlook, and with the whole business and private sector baying for assistance, I cannot see Malta increasing effectively its tax burden and lowering public expenditure in its most suffering sector – health,” Scicluna told Business Today.

Scicluna said the Maltese were “eager” to see efficiency being raised so as to expand the level of service in their hospitals without necessarily spending more. “But I cannot see the Government raising efficiency by cutting costs. I wish the EU Commission could elaborate more on this subject,” the senior economist insisted.

“In the meantime just wait to hear noises from the Government side about stipends blaming the EC for pushing for their downward revision,” Scicluna told Business Today. Scicluna said that he “agreed fully” with the EC’s assessment that a significant part of the reduction of the budget debt during 2004-2007 was the result of one-off privatisations and sale of property. “If we exclude one-off privatisations the debt ratio cannot fall by its own accord unless we manage a surplus on our primary balance. “This was the only reason I thought the EC would fail us in the Euro test. They did not. Fine,” the senior economist told Business Today.

“Now we are facing problems and the EC is still saying it believes our Government’s conclusion that the public finances are sustainable and the glitch was a one time event. I fail to see the logic,” Scicluna insisted. Asked to elaborate on what other avenues the Government has to curb expenditure in view of the fact that there were few public entities suitable for privatisation, Scicluna explained: “The Government has to bite the bullet and ensure that public expenditures fall in line within what the country can bear to pay in taxes. It is that simple,” he told Business Today. “But the Government has been trying to avoid facing this home truth for years on end.

“Of course we may scream and say that this is definitely not the time to do it. And perhaps this time round we are right,” Scicluna explained. “But would the EC listen? Promises are promises,” he warned. In view of how the public finances performed last year, Scicluna was very sceptical about the Government’s ability to meet its budget deficit target of 1.5 per cent of GDP again this year, particularly in view of the economic recession that has hit the Euro area.

“Without giving figures from the top of my head, in the absence of an econometric model, I would say that I would be very surprised if we manage to squeeze ourselves inside the three per cent allowed cap during 2009,” Scicluna told BusinessToday.

Capital projects could re-ignite economy

2009-04-04T08:31:00.000+02:00

Interview by Gerald Fenech, The Malta Business Weekly - 5th March 2009

The capital projects proposed by government could be the key for public finances to recover from the current state which saw the deficit expand by EUR74m in January. Statistics issued last week by the National Statistics Office showed that government debt increased by 117 per cent during January to EUR136.5m, more than double the amount of last year.

Speaking to The Malta Business Weekly, economist Edward Scicluna said that the islands should work hard on EU funded capital projects to receive payment for the work completed. While on paper, EU funded projects require partial government funding, the secondary linkages and tax proceeds from the economy leave a positive effect on public finances.

Prof. Scicluna, however, complained that the situation is precarious with expenditure rising in an unsustainable manner and figures for the whole 2008 still unavailable. “As a Maltese citizen I feel annoyed that government supplies the data to the EU Commission with regards to the Convergence and Stability Programme but does not find it necessary to publish it in Malta. The figures for January 2009 were published while those for the whole of 2008 are still not. Worse we are told that we need to wait till March or April to see last year’s full figures published.

“The data for January, taken on its own, shows a bleak picture of government finances. They give the lie to what has been promised to the EU Commission that the excessive deficit at the end of last year was a one-off due to the energy subsidy and the Dockyard early retirement scheme. I find it hard that the Commission can believe such an excuse.”

We also seem to have convinced the Commission that apart from this one-off item we could quickly bring the deficit under control by increasing the tax burden and reduce the public expenditure portion of the GDP.

“End of January figures show that this could be a dream. How can you promise to squeeze the economy at a time when it is asking for financial oxygen? With a clearly declining economic activity, one would be expected to collect less income tax, less national insurance contributions and over time less VAT.”

Asked which sectors have contributed towards the deficit ballooning in such a manner, Prof. Scicluna acknowledged that the energy benefit and the ’yard’s early retirement scheme did contribute towards the deteriorating state of public finances, although he adds a caveat that expenditure “exploded” across all sectors.

“According to government, it is the one-time EUR100m spent on the energy subsidy and early retirement scheme. The figures show that public expenditure exploded across all sectors, with some more than others. Wages took a spike in 2008 and remained high thereafter. Transfer payments too have increased. Since none of these public sectors have been restructured, this upward pressure is to be expected. What we are seeing is government containing expenditure by making it difficult for the entitled consumer to get his deserved service. Out of stock pills and hospital queues are a symptom of this ‘expenditure containment’ method. We all know that this is not sustainable.”

Prof. Scicluna also explained that the deficit will continue to grow as the economy worsens and more public sector money is put into the economy to prop up ailing sectors. “This is one of the tenets of macro-economic policy that during an oncoming recession the automatic stabilisers fire in. These are money from the public sector which automatically are paid to those who are being hit negatively by the current recession. This will benefit the economy, but obviously worsens the deficit. Beyond this, there is the more obvious fact that less income tax, national insurance contributions and VAT are collected when the economy falters.”

Asked whether government debt has become unsustainable in the long run, Prof. Scicluna explained that a slowdown in growth will further accelerate debt as the interest being paid by government to service the debt will probably be exceeded eventually.

“The debt ratio is made up of the gross debt and the GDP. For the ratio to stop growing we require that for the future, the rate of economic growth rises faster than the interest rate paid by the government to service that debt. Once the debt servicing rate of interest exceeds the rate of economic growth, the debt burden shoots up. The longer the recession the faster the burden grows.”

A piglet on Noah's Ark

2009-04-04T08:20:00.000+02:00

Published on The Times of Malta - Wednesday 25th February 2009

In spite of the great foreboding 10 years ago, that the eurozone is not exactly the United States with its near optimum currency area characteristics, results have shown that it did pretty well. Its members saw satisfactory rates of economic growth, equally impressive rates of job creation and subdued inflation; really, a model of economic stability. This happened in spite of the lack of independent economic adjustment by the individual eurozone members normally used to independent monetary and exchange-rate policies.

However, it must be recalled that many of its promoters wished it would be much more. The euro was supposed to be an engine driving supply-side reforms across its member states, making them more productive and competitive than any other world economic block. Actually, this did happen with a number of eurozone countries. Germany, Austria, Finland and the Netherlands did indeed bite the bullet and duly implemented reforms to make their economies more flexible and more competitive.

With time, though, the zone was turned into an animal farm, with some animals being more equal than others. At one end a group of like-minded Mediterranean countries, nicknamed "PIGS" in view of the fact that the main protagonists were Portugal, Italy, Greece and Spain, were having a different view of the eurozone. Their view all along has been that the eurozone was itself a safe haven. It would serve them as a Noah's Ark in times of a global financial deluge.

Fine. So they made supernormal efforts to qualify and join at any cost. They increased taxation significantly and introduced one-off fiscal schemes, kept expenditure temporarily on hold and kept wage increase at bay until the euro test-time. One particular country, Greece, was even subsequently caught cheating and got fined.

As soon the euro test was over, these countries, having felt secure with having boarded what each believed is Noah's Ark, have gone back to their old practices and economic sinful behavior. The euro saw the end rather than the beginning of their economic reforms. Sounds familiar? The result now is that the eurozone is no longer seen as a top notch club of first-class economies but a club with two classes of members. The "PIGS" group is showing common symptoms: High effective exchange rate and endemically uncompetitive exports, rising unit labour costs, deteriorating current account balances and similar deterioration of its member's public finances. With an economy that seems to be and, in fact is, stuck, the feeling is dismal and general frustration is there for all to see. Feeling cosy within the eurozone, their respective peoples, however, have no appetite for painful reforms. In fact, their political masters have ruled this out in no uncertain terms.

In the face of greater global stress, a sharp rise in bond spreads are being observed for Portugal, Italy, Greece, and Spain. You cannot expect, in these testing times, that capital markets will be less forgiving of high public debt or rising budget deficits. To make matters worse, Standard & Poor's - a credit-rating agency - has recently downgraded Spain, Portugal and Greece.

Which brings us to our own predicament. Like the "PIGS", we too made strenuous and admittedly heroic efforts to join. We truly believed that we could not stay out in the cold. Even now, we are thankful that we are cosy within, watching the outside world fall apart. Non-eurozone island states like Iceland are pointed out to us like a Titanic film watched from the cosiness of our sitting room.

But are we sure we are not the piglet on Noah's Ark? Are not our symptoms very much akin to the "PIGS" family? Are not our exports and tourist services uncompetitive? With exports falling record heights when compared to all the other European Union countries, resulting in yawning current-account imbalances. Has not the IMF and, more recently, the EU warned us about the repercussions of unsustainable wage agreements in 2008? And how can we explain that we managed to break all three sacred vows we took when we joined the eurozone, namely not to exceed the three per cent deficit-GDP ratio, to keep inflation low and to maintain a declining debt ratio.

Most economic observers were fooled when they thought they heard the European Commission telling EU members to stimulate their economies through more spending. They thought that the message was meant for all the member countries irrespective of whether they had room to manoeuvre or not. Of course, they were wrong. It was only meant for surplus and not hugely indebted countries like the "PIGS" family and piglet Malta.

It must have come as quite a shock to many last week that Malta was close to be slapped by the EU's standard "excessive deficit procedure". Instead, we were given a reprieve. Unlike Latvia and the other wavering countries, we were smart enough to impress on the Commission that this state of economic affairs was a one-time quirk, almost a mirage. And, of course, we are now in for a bigger shock. Because the reprieve was conditioned by the promise that Malta would soon get its public finances in order in two principal ways; One, by cutting public expenditure as a result of a health reform and, two, by increasing the tax burden by nearly a percentage point of the GDP. Yes, you read well. This much is stated to have been promised in the European Commission's Assessment of Malta's Stability and Convergence Programme.

How we can promise this plan in the face of increasing pressure from the business and private community for some relief from the scourge of the impending recession boggles the mind of anyone, not least the economist.

Prof. Scicluna is a Labour candidate for the European Parliament elections

Most households paying €120-€240 more a year

2009-02-06T01:44:00.000+01:00

Published on Times of Malta

Saturday, 31st January 2009 by Kurt Sansone

The vast majority of households will see their yearly utility bill increase by between €120 and €240, according to an impact analysis of the new tariffs carried out by the Malta Resources Authority.

Around 32,000 households will see their bills go up by between €120 and €160 a year while a further 46,000 households will experience increases of between €160 and €200.

Some 28,000 households can expect to see hikes of over €240 while another 42,000 could expect yearly expenditure on water and electricity to rise by between €240 and €280.

All increases are over and above what consumers had been paying with the 95 per cent surcharge.

The impact analysis has also established that around 56 per cent of households should benefit from the eco-reduction on electricity consumption on every bill while 24 per cent would only benefit "sometimes". A further 20 per cent of households will receive no eco-reduction at all.

The analysis was presented yesterday to the 11 unions that are still contesting the bills. The meeting lasted just over two hours.

Significantly, the regulator said its technical analysis is "more accurate" than the one which auditing firm KPMG had done for Enemalta in terms of the figures for single-person households and accounts for places where no people live.

This very point was one of the issues raised by economist and Labour MEP candidate Edward Scicluna, who argued that the government had included garages, for instance, in the list of households which were meant to benefit from an eco-reduction under the new regime for utility bills.

The authority reached its conclusions after a detailed analysis of real invoices issued to households for the period April 2006 to December 2007. The invoices were those for actual meter readings rather than estimates.

An MRA official reluctantly admitted that Enemalta's auditors, KPMG, had the possibility of conducting a similar detailed exercise before coming up with the tariffs. However, he insisted the exercise required "particular skill".

In analysing the impact of the social assistance vouchers granted to needy families, the MRA only calculated the impact on a typical four-person household. In this case, most eligible families will benefit from a 20 per cent reduction in their bill, according to the authority.

The regulator admitted that a similar exercise would need to be carried out for single person households in order to establish the impact of the vouchers on pensioners. Single person households are more likely to be inhabited by pensioners.