Which EU

The Times of Malta

Which EU`

If you are confused in understanding the EU which Malta would eventually be offered to join you need not despair. The shape of the EU which will be in a position to take on new members has still to be decided.

The ink was hardly dry on the Feira summit documents that the Fronco - German axis continued with its pioneering of the grand Europe dream which in their view can only be built by nation states rather than by an unelected EU Commission.

So whilst the Commission is hard put to bring member states to an agreement on conclusion of the IGC to help smoothen the decision making process of an enlarged community, President Chirac has again echoed the thoughts expressed one month earlier by German foreign minister Fischer about the need to push ahead with a multi-level Europe.

In the Nice Summit of next December the Council will at best decide, if agreement can be reached , that is, on the composition of the 20 strong Commission meaning that some countries will permanently or temporarilty be without a commissioner. It will decide on the quasi total elimination of the consensus voting and will re-weight the voting strength of the Council to give weight to the size of the population represented in each country.

It will also decide on canonising the right of certain country to go for closer co-operation among` them without` being subjected to the veto of other countries who do not like the creation of a multi-speed EU.

But even if, and it is a big if, all this could be agreed at the Nice Summit the message coming out from the Franco-German axis is that it still does not provide sufficient stability for an enlarged community of near 30 members. In President Chirac`s words enlargement should not be undertaken in such a rush that it leads to the anravelling of the European project. Reform of the institutions of Europe should ensure that there is no dilution of what has been accomplished.

So Chirac endorses the German call for a further Iner-Governmental Conference in 2004. Chirac even goes beyond that. Why wait till 2004` Why not form a pioneer group (included Germany and France in the front row, of course) to establish a form of loose-co-operation, establish a `light` secretariat and propose a constitution for the EU.

One can hardly think of a happening which could have undermined more the Commission`s authority right at the time as it is struggling without much success to square the circle of rapid enlargement with deeper harmonisation among members. Also right on the eve of the French presidency which clearly Chriac intend to make his own presidency keeping an eye of the approaching presidential elections in France.

Much to the Britsish dislike, the Franco- German axis seems bent, as paymasters of the EU, to reform it their own way. The creation of a multi level Europe does not necessarily simply mean an inner and an outer group. Rapid enlargement can only happen if there is flexibility permitting countries to integrate with others in full respect of their nationhood and with due regard to their particular characterics which in the course of time may converge sufficiently to create the grand European dream.

Without such flexibility the whole EU model would just crumble. The fact that Germany and France have decided to side-step the institutions and build their version of Europe on the basis of the nation state represents the fleshing up of the variable geometry concept for a successful enlargement within which Malta is more likely to come to terms with membership.

Labour`s `No/Not now/No but` approach to EU memebrship could in the end be rewarded by an EU flexible enough to accommodate Labour`s demands for gradual economic integration but excluding poltical absorption an envisaged in the current EU model.

Swiss Dividend

The Malta Independent Swiss Dividend

The Feira EU Council Meeting of 19/20 June gave a quick dividend to the Swiss bilateral arrangement negotiated with the EU outside the membership route.

The EU leaders spent most of their summit time negotiating the final touches to the question of bringing fiscal uniformity to the treatment of interest on investments and savings which residents of the EU have cross (no longer existing) border with banks of other member states.

Having made substantial progress on the single market and the economic and monetary union project, it is inevitable that uniformity must also come in the question of fiscal policies especially for cross-border transactions among persons from member states.

Up to the Helsinki meeting of last December the project was meant to achieve uniformity through the tax at source concept. This found the strong opposition of the British who feared that such an imposition would drive the Eurobond market out of London.` In the negotiations leading to the Feira meeting the concept was changed to a duality; either pay tax at source or else be subjected to full disclosure of interest payment to the home tax authorities.` Quite similar to the domestic fiscal treatment of interest revenues!

At Feira, `Britain demanded that the duality should be restricted to the transitory period only and the final position was to be full disclosure.` This was resisted mostly by the Austrians. They finally conceded provided that they will be allowed to keep the tax at source arrangement with bank secrecy for its own residents.

Where does this leave Malta as an applicant country to the EU` Firstly it was decreed at Council level that no derogation from exchange of information requirement shall be granted in enlargement negotiations with accession countries. So we will be obliged to share information about non-resident depositors with their home country tax authorities. This will remove one of the attractions we have been promoting to build our international financial centre.

Secondly Britain has committed itself to adopt the same measures in the Channel Islands, Isle of Man and dependent or associated territories in the Caribbean. So these international financial centres can also lose their major tax haven attraction of banking secrecy. This could expose to the local exchequer substantial interest revenues earned by domestic residents `which are currently beyond its reach in these financial centres so familiar to many Maltese.

Against this scenario Switzerland, Monaco, Andorra, Liechtenstein and San Marino are also expected to come on line with this new EU initiative and the EU has marked a two-year period of negotiations to achieve this aim.` However these countries have no obligation to comply and the Swiss reply to such an approach was quick and sharp.

A raised eye-brow, a reference to the fact that they stayed out of the EU not to be obliged to adhere to decisions taken by others and a quick counting of their dividends.

Even if matters take long to materialise the psychological blow has been dealt. Banking secrecy for non-dirty money can only be guaranteed in financial centres outside the EU and totally independent of any EU member countries.` With the Swiss model and with our financial legislation gaining international recognition as a sufficiently protective against attraction of dirty money, Malta too could also have been counting its dividend. But our one-way EU policy has landed us with the worst of both worlds. Giving up the benefits of being out without enjoying the benefits of being in.

Alfred Mifsud

L-isqallin

Il-Kullhadd L-Isqallin

In-Nazzjonalisti u l-forcini taghhom donnhom qatghu qalbhom li jistghu jikkonvincu fuq it-triq tas-shubija ta` Malta fl-UE. Minflok issa fethu l-kanuni biex jippruvaw jiskreditaw il-mudell ta` Svizzera fil-Mediterran.

Din it-triq ga giet maghzula mill-Isvizzeri u ghalhekk is-slogan tal-Partit Laburista ta` Svizzera fil-Mediterran. Mhux biex nikkupjaw dak kollu li ghamlu l-Isvizzeri. Izda biex nippruvaw li mudell jezizti diga`.` La l-Isvizzeri kienu kapaci jinnegozjaw ftehim bilaterali ma l-UE meta l-UE b`hekk tilfet il-flus li l-Isvizzera kienet tikkontribwixxi lejn il-budget ta` l-UE kieku ssiehbet, kemm huwa aktar` fattibbli li Malta taghmel l-istess meta suppost l-UE b`hekk tiffranka il- fondi li suppost kienet ser tiehu Malta`

Pagni shah ta` reklamar u tqanzih biex jikkonvincu li permezz ta` dan il-mudell Svizzeru Malta tiehu l-izvantaggi izda mhux il-vantaggi ta` shubija fl-UE.

U fost l-izvantagg li l-aktar jigi emfassizzat huwa li permezz ta` ftehim bhal dan ikollna naccettaw id-dritt li persuni mill-pajjizi membri ta` l-UE jigu jahdmu bi dritt f` Malta.

Ta` min dan il-punt jixtarru sew. Il-pajjizi tal-lvant li jridu jidhlu fl-UE qed jinsistu ghal dan id-dritt li jidher li l-UE qed tkaxkar saqajha dwaru. Dan ghaliex dawn il-pajjizi li ghandhom fruntiera mal-Germanja u ma l-Awstrija ma ghandhomx biza li l-Germanizi u l-Awstrijaci jimorru jahdmu fir-repubblika Ceka jew fl-Ungerija u l- Polonja. Huma l-Germanizi u l-Awstrijaci li ghandhom biza li haddiema mill-pajjizi membri godda jinvaduhom u joholqu problemi socjali u ekonomici.

Ahna f`Malta il-problema bil-maqlub. Il-biza mhux tant li l-haddiema taghna ser jinvadu l-Italja. Il-biza huwa li haddiema minn Sqallija jithajjru jigu jahdmu fostna ghax Sqallija hemm qaghad kbir l-aktar fost iz-zghazagh. Ghalihom Malta hi attrajenti iktar milli jmorru Ruma jew fin_Nord ta` l-Italja fejn dejjem jigu ttrattati bhala cittadini nferjuri.

Mela l-argument li meta dahlet il-Finlandja ma kellhix invazjoni mill-maddiema tal-pajjizi membri l-ohra qajla jghodd ghall-istat ta` fatt taghna. Ahna zewg passi boghod minn post fl-UE fejn ir-rata ta` qghad fost iz-zghazagh hija 25%.` Ahna zghar u anke jekk jigi ftit eluf jizbilancjawna. Tibza l-Germanja u tibza l-Awstrija ghageb ghax tibza` wkoll Malta`

Ghalhekk huwa assolutament mehtieg li niftehmu x`niftehmu ma l-UE id-dritt ta` dhul ta` haddiema mill-pajjizi gieren jibqa kkontrollat minnha ghal perjodu twil ta` zmien zgur mhux inqas minn hames snin.

Sal-lum dan m`huwiex possibbli taht l-arragament ta` shubija. Izda biex inkun ghedt kollox halli hadd ma jahseb li rrid immaqdar bla bzonn, jidher li qed tifforma l-ideja li anke meta` jidhlu membri godda id-dritt ta` cirkolazzjoni libera jigi ristrett ghal perjodu transitorju.` M`hemm xejn zgur.` Hemm biss indikazzjonijiet. ` Dan kif ghedt qabel qed isir biex jipprotegi lill pajjizi ezistenti ta` l-UE izda la l-principju jigi accettat allura jkun aktar possibbli li tinnegozja biex il-principju taddattah ghal bzonnijiet ta` pajjizek.

Izda zgur li dan` huwa possibbli, `ferm aktar possibbli,` taht il-mudell Svizzeru. Dan m`huwiex zvantagg. Dan huwa ftuh gradat ta` l-ekonomija taghna biex issir kompetittiva` f`dinja globali.`

Daqqa jghidu li l-alternattiva ghas-shubija huwa l-izolament u daqqa jgidu li permezz tal-mudell Svizzeru ser igiegheluna naccettaw cirkolazzjoni libera tal-persuni!

Jakkuzawna` li qed inbezzghu in-nies bil-babaw meta fil-fatt issa bdew jaghmlu hekk huma!

Il-verita` hija semplici. Ahna taht l-ebda mudell ma rridu li pajjizna jkun izolat.` Pajjizna huwa zghir wisq biex noqghodu ndawru lira biss bejnietna. Ghalhekk ma hemm xejn, xejn hazin li pajjizna jiftah is-suq tieghu ghal cirkolazzjoni libera ta` persuni ma l-UE. Izda dan ma rridux naghmluh mil-lum ghal ghada. Ma rridux naghmluh biex noghgbu lil xi hadd iehor.` Naghmluh ahna ghat-temp taghna ghax ikun jaqblilna.

Nohlom li f`pajjizna tant l-ekonomija tkun sejra tajjeb li jkollna bzonn haddiema barranin biex inlahhqu. Din il-holma tista` ssir rejalta` jekk nahdmu b`rasna, nifhmu x`inhuma il-vantaggi u l-izvantaggi taghna u nuzaw il-qaghda strategika ta` pajjizna biex insarrfuha f`negozjati vantaggjuzi ma l-UE biex dak li nikkoncedu nikkonceduh ghax, kif u meta jkun jaqblilna.

Meta tintlahaq din ir-rejalta` allura ma jkunx hemm izjed biza li` l-Isqallin jigu jikluna. Anzi jkun merhba bihom.` Il-gwaj hu jekk bi shubija bla ma nsolvu il-problemi ekonomici ikollna nifthu s-suq tax-xoghol ghal barranin meta l-ekonomija tkun ghada zoppa u meta investiment dirett m`hu jersaq lejna xejn.

Min ma jaghmilx din id-distinzjoni irid iqarraq.

Reality Knocks

The Malta Independent

Reality Knocks

Promises come cheap. They impress, gain votes and power. Unfortunately we lack the culture of obliging our politicians to explain how they intend to fund their easy promises.

Time however is an unforgiving judge.` The creditworthiness of those who go easy on their promises meets its fate with the passage of time. The Lm100 million EU funds has become a sickly joke. It irritates the many that voted out a Labour Government after two years. They regret swallowing the bait, hook, line and sinker that freezing of our membership bid for the EU was making the country forfeit such easy revenues.

Reality has knocked this mirage flat on its face.` What`s more offensive is that these empty promises were made by experts who definitely had first hand knowledge that these were myths not facts.

The problem is that apparently our Treasury managers also swallowed this promise.` Quick on the heels of a nationalist election victory in September 1998 they gave the green light to the financial commitment for a collective agreement for public sector employees.` The benefits were structured to impact largely in 2001 by which time it was hoped to establish the safe flow of such easy money. Some Lm40 million benefits mature in fiscal year 2001.

Such a commitment in the face of a harrowing budget deficit can only be justified if someone took seriously the pledge of our receiving some Lm100 million each year from the EU to balance our growing budgetary gap.

Reality is now knocking on our doors. The commitments of the collective agreement are inescapable and next year the public budget has to account for this upward shock in recurrent expenditure.` An expenditure that has not been in any way compensated by productivity increases.

The bursting of the easy EU money balloon means that what was meant to be financed by this easy money must now come from our own tax money given that we have exhausted our borrowing capacity.

The extra revenue that will be drawn from the overdue tightening of fiscal enforcement screws should be going towards easing our direct tax rates and towards fiscal incentives to stimulate investment and savings for supplementary pensions.` Instead we have to channel such funds into honouring wasteful electoral pledges, which strengthens the wealth `destruction side of our budgetary gap. A typical case of politicians using our hard earned tax money to buy themselves into power.

Alfred Mifsud

The holiday is over or is it

The Times of Malta

The holiday is over`.or is it`

Tax evaders should consider their holiday as over, warned sternly the Minister of Finance` indicating that the government is finally getting equipped with tools to spot offenders and to throw the book at them.

This should be applauded. Tax evasion is one of the most unsocial state of affairs and no modern economy can achieve sustainable growth if it does not equip itself with effective weaponry to fight it.

It is also to be hoped that government`s resolve does not get diluted by political convenience as electoral tests start to approach. I think we have been through this road before but it is never too late to re-try.

However even if the government gets all the success it is proclaiming from tax revenue collection this will be only a temporary respite from tax evasion unless other `holidays` are also brought to an end. If the tax-payer does not get satisfaction that his tax money is being well spent rather than simply sent down the big black hole tax payers will find the simplest loop-hole in the fiscal gamut. They will simply stop investing locally and will start amassing capital in centres out of our taxman`s reach.` The taxman can only get richer if the whole economy gets richer. If the taxman gets richer while the whole economy grows at much slower rate than the growth of the tax take,` then something will backfire sooner rather than later.

So tax evasion is not the only holiday that should end .` There should be an immediate end to the holiday on` accountability. This is a must in order to give the tax-payer due account that revenues extracted from him are being well spent.

And lack of accountability has never been worse than its current state. Gone are the days when Ministers resign because they recommend a few days presidential pardon to a prisoner without cabinet approval.` Instead we get the Prime Minister refusing the resignation of the Prison Director following repeated failure in the prison security system even though the Prison Director admits that resigning was the appropriate decision in the circumstances.

What accountability have we had for the poor return we got from the privatisation of Mid-Med Bank In which serious country would such a gross misjudgement which cost public coffers several ten of millions of liri, had been allowed to go on without a single resignation` How can our intelligence accept that this strategic huge deal could be single-handedly concluded by just one person without expert advice Why did I never get a decent reply to my query as to why the valuations ostensibly prepared by the Maltese side include a 6% risk premium in the discount factor of future earning streams` This is utter and downright unaccountability by the very same person who now demands our complete tax accountability.

Where is the accountability in the civil service` Some localised or peripheral improvement in particular departments is not denied. But what about the general picture Employment in the public sector has started to grow again in spite of all talk of excess manpower.` What initiatives have been taken to start addressing this excess manpower` What re-training programmes have been embarked upon` What incentive programmes have been launched to stimulate the migration from public sector to private sector employment particularly in productive areas where the market offers a sufficiently competitive environment`

What accountability do we have on the impact of high oil prices on the trading performance of the national energy company` Who was responsible for the decision not to hedge against such oil price increase` Why was such hedging under a Labour Government so much scorned by the Minister now responsible for the heavy losses being incurred when such hedging, if properly used,` could be a very effective risk management tool`

Who is accountable for the poor states of our shipyards which are absorbing a very big chunk of our productive (sic!) investment budget.` Where was the foresight of our managers in allowing the shipyards to reach this pitiful state after absorbing and wasting so much resources whilst Nordic shipyards just can`t keep up with the order book for new cruise liners. If the market wants cruise liners why do we insist on building timber carriers, tankers or ferry boats`

And finally who is accountable for the horrendous state of tax evasion as depicted by the Minister` He is not exactly new in his post! Why is it that only now that we have to get the money to fund the civil service pay increases maturing next year that we are being forced to apply` fiscal enforcement in a desperate crisis approach`

If the tax evasion holiday has to end in a sustainable matter we need to kiss good-bye our accountability holiday. I can almost hear the calling` `next question`.

The other Option

The Malta Independent on Sunday

The Other Option

Typical of the way the government is losing its information battle in the run-up to the supposed referendum on the EU is that recently we seem to be discussing more the merits and demerits` of the Swiss model rather those of EU membership.

I say supposed referendum because I do not see much likelihood of the referendum being held on this side of the election. Presumably the only potential winners from holding a referendum during this legislature would be the Labour Party. If the referendum fails, as most indicators are pointing that it would , than the government would have its mandate and political platform wiped away from under its feet. The nationalists could thus be forced to early election without a solid political platform.

So unless the Nationalists would wish to return Labour`s compliment of sacrificing everything for the obsession of just one man, I see no prospect for a referendum until after a general election which will come in its due time in 2003 latest Feb 2004.

Even though many are still totally unsure as to which is the best option between membership and special arrangement Swiss style, yet at least these many know that the choice is not what they` were led to believe.` It is not a choice between being totally in or totally out; between being part of the global world or being isolated. They know there are other routes to have optimum relations with the EU without going for the entire obligation of membership and yet still be competitive in the globalised world.

One should therefore delve deeper into the other option ` the bilateral agreement route just concluded by the Swiss. The argument as to whether or not` this is possible is now dead. The Swiss made it and there is no reason why we should fail as we have as many negotiating cards as the Swiss to strengthen our hands.

Critics to this option sound hollow when they argue it is` isolationist. That argument is dead too. Switzerland is not isolated as neither for that matter are Norway, Iceland, Liechtenstein Andorra, Channel Islands, and Monaco.

So they argue that this option offers the obligations of membership without the benefits.` Now the Swiss have been offered membership and refused it, have been offered the EEA and refused it. They have however whole-heartedly approved the bilateral agreements. Now either the Swiss have lost their mind,` which is certainly not the case, or they can tell a good deal when they see one.

So the argument continues that Malta is no Switzerland as Malta would net a net fund beneficiary` from membership whereas Switzerland would have been net contributors to the coffers of Brussels given their high standard of living.

Now this matter of funding has been over-used and abused and so far no one has brought the tiniest shred of evidence about our being entitled to funding. So this hypothesis of our being entitled to a lot of funding remains a pie in the sky ready to be used in the next elections.` I have been making two questions about this matter which met with dead silence.` I bet my bottom dollar that on purchasing power units basis Malta would exceed the 75% EU average GDP as recalculated to include the 10 east European candidates and Cyprus. Once we go over this threshold our entitlement to funding dilutes itself substantially.

Secondly by losing the privilege of acquiring our food and raw material supplies from the cheapest international sources are we not paying indirectly for the funds we will receive` So its our own money after all!

Put in this context the question of accepting all the burdens without the benefits loses conviction. What` about the benefits of being able to establish free-trade arrangements with other economic blocs like the Euro-Med area and NAFTA. What about the benefit of modelling our financial services differently from all the rest`

This is no invitation to rush into the conclusion that the Swiss option is better than membership.` Just to accept that it is a viable alternative to be considered alongside membership. Indeed our negotiators should pounce on such an alternative as it gives them a strong hand to negotiate with the Brussels bureaucracy.

But then they hardly need it. They don`t seem to be negotiating anything. They are just taking notes of which laws we need to change.` Brussels keep reminding them that it is not so` much a simple exercise of changing laws but a much more complicated one to enforce them. We don`t even seem to be getting the simple ones right and keeping sending to parliament half-baked contradictory laws which are not discussed before even if they effect such matters as broadcasting and communications.` Just imagine when we come to the enforcement hard bit!

Alfred Mifsud

Is-suq tax-xoghol fl-UE

Il-Kullhadd Is-suq tax-xoghol fl-UE

In-Nazzjonalisti u l-forcini taghhom donnhom qatghu qalbhom li jistghu jikkonvincu fuq it-triq tas-shubija ta` Malta fl-UE. Minflok issa fethu l-kanuni biex jippruvaw jiskreditaw il-mudell ta` Svizzera fil-Mediterran li huwa slogan li permezz tieghu il-Partit Laburista qed ifiehem li hemm triq ohra ta` ftehim bilaterali ma l-UE.

Din it-triq ga giet maghzula mill-Isvizzeri u ghalhekk is-slogan ta` Svizzera fil-Mediterran. Mhux biex nikkupjaw dak kollu li ghamlu l-Isvizzeri. Izda biex nippruvaw li mudell jezizti diga`.` La l-Isvizzeri kienu kapaci jinnegozjaw ftehim bilaterali ma l-UE meta l-UE b`hekk tilfet il-flus li l-Isvizzera kienet tikkontribwixxi lejn il-budget ta` l-UE kieku ssiehbet, kemm aktar` fattibbli li Malta taghmel l-istess meta suppost l-UE b`hekk tiffranka il-fondi li suppost kienet ser tiehu Malta`

Pagni shah ta` reklamar u tqanzih biex jikkonvincu li permezz ta` dan il-mudell Svizzeru Malta tiehu l-izvantaggi izda mhux il-vantaggi ta` shubija fl-UE.

U fost l-izvantagg li l-aktar jigi emfassizzat huwa li permezz ta` ftehim bhal dan ikollna naccettaw id-dritt li persuni mill-pajjizi membri ta` l-UE jigu jahdmu bi dritt f` Malta.

Ta` min dan il-punt jixtarru sew. Il-pajjizi tal-lvant li jridu jidhlu fl-UE qed jinsistu ghal dan id-dritt li jidher li l-UE qed tkaxkar saqajha dwaru. Dan ghaliex dawn il-pajjizi li ghandhom fruntiera mal-Germanja u ma l-Awstrija ma ghandhomx biza li l-Germanizi u l-Awstrijaci jimorru jahdmu fir-repubblika Ceka jew fl-Ungerija u Polonja. Huma l-Germanizi u l-Awstrijaci li ghandhom biza li haddiema mill-pajjizi membri godda jinvaduhom u joholqu problemi socjali u ekonomici.

Ahna f`Malta il-problema bil-maqlub. Il-biza mhux tant li l-haddiema taghna ser jinvadu l-Italja. Il-biza huwa li haddiema minn Sqallija jithajjru jigu jahdmu fostna ghax Sqallija hemm qaghad kbir l-aktar fost iz-zghazagh. Ghalihom Malta hi attrajenti iktar milli jmorru Ruma jew fin_Nord ta` l-Italja fejn dejjem jigu ttrattati bhala cittadini nferjuri.

Ghalhekk huwa assolutament mehtieg li niftehmu x`niftehmu ma l-UE id-dritt ta` dhul ta` haddiema mill-pajjizi gieren jibqa kkontrollat minnha ghal perjodu twil ta` zmien zgur mhux inqas minn hames snin.

Sal-lum dan m`huwiex possibbli taht l-arragament ta` shubija. Izda biex inkun ghedt kollox halli hadd ma jahseb li rrid immaqdar bla bzonn, jidher li qed tifforma l-ideja li anke meta` jidhlu mebri godda id-dritt ta` cirkolazzjoni libera jigi ristrett ghal perjodu transitorju.` Dan kif ghedt qabel qed isir biex jipprotegi lill pajjizi ezistenti ta` l-UE izda la l-principju jigi accettat allura jkun aktar possibbli li tinnegozja biex il-principju taddattah ghal bzonnijiet ta` pajjizek.

Izda zgur huwa possibbli u ferm akatr possibbli taht il-mudell Svizzeru. Dan m`huwiex zvantagg. Dan huwa ftuh gradat ta` l-ekonomija taghna biex issir kompetittiva` f`dinja globali.`

Daqqa jghidu li l-alternattiva ghas-shubija huwa l-izolament u daqqa jgidu li permezz tal-mudell Svizzeru ser igieghelna naccettaw cirkolazzjoni libera tal-persuni!

Jakkuzawna` li qed inbezzghu in-nies bil-babaw meta fil-fatt issa bdew jaghmlu hekk huma!

Il-verita` hija semplici. Ahna taht l-ebda mudell ma rridu li pajjizna jkun izolat.` Pajjizna huwa zghir wisq biex noqghodu ndawru lira biss bejnietna. Ghalhekk ma hemm xejn, xejn hazin li pajjizna jiftah is-suq tieghu ghal cirkolazzjoni libera ta` persuni ma l-UE. Izda dan ma rridux naghmluh mil-lum ghal ghada. Ma rridux naghmluh biex noghgbu lil xi hadd iehor.` Naghmluh ahna ghat-temp taghna ghax ikun jaqblilna.

Nohlom li f`pajjizna tant l-ekonomija tkun sejra tajjeb li jkollna bzonn haddiema barranin biex inlahhqu. Din il-holma tista` ssir rejalta` jekk nahdmu b`rasna, nifhmu x`inhuma il-vantaggi u l-izvantaggi taghna u nuzaw il-qaghda strategika ta` pajjizna biex insarrfuha f`negozjati vantaggjuzi ma l-UE biex dak li nikkoncedu nikkonceduh ghax, kif u meta jkun jaqblilna.

Meta tintlahaq din ir-rejalta` allura ma jkunx hemm izjed biza li` l-Isqallin jigu jikluna. Anzi jkun merhba bihom.` Il-gwaj hu jekk bi shubija bla ma nsolvu il-problemi ekonomici ikollna nifthu s-suq tax-xoghol ghal barranin meta l-ekonomija tkun ghada zoppa u meta investiment dirett ma jersaqx lejna ghax is-shubija ccahhad il-vantaggi ekonomici ta` nvestiment gdid dirett f`pajjizna.

Min ma jaghmilx din id-distinzjoni irid iqarraq.

The Worst Solution

The Malta Independent

The Worst Solution

Recent pronouncement about the imminent privatisation of the Public Lotto, Freeport, MIA and others offers prospect of` the worst solution to our economic problems.

Not that I have anything against` the principle of privatisation. I am against the adoption of privatisation for the generation of extraordinary funds to plug the budgetary hole for a temporary period until privatisation revenues run off.

Such announcement becomes particularly painful when it co-incides with news from the money destruction machine on the expenditure side of public finances.

Malta Drydocks and Malta Shipbuilding we are told are nowhere near being turned round. Without entering into the merits of the discharge of the CEO our shipyards` problem takes much more than one dismissal to address. Certainly the supposed merger between these two loss-makers is no solution either.` A big problem is best addressed by being broken down into a number of smaller manageable problems rather than being merged with a bigger one to form a problem of titanic proportions.

The only sensible argument I ever got from our shipyards as to why they expect to continue being favoured by subsidies from hard earned tax money is that they work harder and in much worse conditions than public sector employees. So if there is money for the latter there should be money for them.

Can`t fault such reasoning especially when we are regaled with a week long bash explaining how effective and efficient our public sector has become. Little matter that a court notice filed on the 18th May was delivered on the 8th of June demanding that I appear in court on the 9th of June! Quality charter my foot!

So we keep sending hard earned money down this big black hole and because we have to bring down our deficit to Brussels liking and` we can`t keep on borrowing we go for the next most easy solution. Sell all the assets, keep everybody happy for some more time and God helps whoever follows.

Privatisation makes sense when it adds value. It should therefore be applied primarily as an important tool in re-structuring our inefficient sectors by turning them round and inducing new rules of the game.

Where privatisation just brings a change of ownership without any value-added then it is just a wasteful financing exercise. We have had enough of this in the Mid-Med case now that by HSBC`s own admission the supposed value added of attracting international business is a mere pie in the sky.

Alfred Mifsud

Domma tal-Fidi

Il-Kullhadd Domma tal-Fidi

Id-diskors tal-Prim Ministru f`gheluq il-konferenza generali tal-hadd li ghadda rega` kien professjoni ta` fidi ghamja fl-UE.

Fid-diskors twil tlett kwarti il-Prim Ministru kellu messagg baziku wiehed. L-UE trid temmen fiha qisha xi domma tal-fidi. M`hemm x ghalfejn wiehed joqghod jifli d-dettalji biex jara x`jaqbel u x`ma jaqbilx ghax bhal ma temmen id-domom mhux bir-ragunar izda bid-don tal-fidi hekk irridu wkoll nemmnu` fl-UE.

Il-Prim Ministru spicca stqarr li huwa ta` sfortuna ghal pajjizna li ghandu oppozizzjoni li qed tifli sewwa u tirraguna b`mod sobriju dwar il-vantaggi u l-izvantaggi tas-shubija fl-UE. Li kien ghal Prim Ministru` l-oppozizzjoni ghandha temmen fl-UE bhalma nisrani jemmen fit-Trinita` Mqaddsa u ma toqghodx tistaqsi il-kif u l-ghaliex.

Biex jasal ghal ragunar bhal dan il-Prim Minsitru bilfors qed jigi nfluwenzat wisq mill-fatt li fil-pajjizi applikanti l-ohra il-korp poltiku tal-pajjizi kollha huwa favur shubija anke jekk fost il-popli hemm dubji.

Kif fissirt kemm il-darba dak li jghodd ghall-pajjizi applikanti ohra ma jghoddx ghal Malta. L-ghaxar pajjizi tal-lvant ghandhom kunsens biex jidhlu membri ghax jemmnu li shubija sseddaq u mhux ixxellef is-sovranita` taghhom. Jemmnu hekk ghax ghandhom l-esperjenza qarsa ta` dominazzjoni Sovjetika fil-45 sena ta` wara l-gwerra u jibzghu li hekk kif ir-Russja tohrog mill-krizi ekonomika terga` tithajjar tahfinhom taht l-influwenza taghha. Ghal dawn il-pajjzi shubija fl-UE hija difiza tas-sovranita` mheddha taghhom.

Ghal Cipru l-istorja hija differenti. Cipru ilu maqsum fi tnejn mill-1974.` Il-bicca tat-tramuntana ta` Cipru hija mahkuma fil-forzi Torok. Ic-Ciprijotti joholmu li pajjizhom jerga jinghaqad. Jemmnu li dan jista` jsir biss jekk jidhlu membri fl-UE u minn hemm juzaw il-forza biex igieghlu lill-UE tmil fuq it-Turkija halli tasal ghal soluzzjoni negozjata ghar-rijunifikazzjoni ta` Cipru.

Ghalhekk ghal hdax il-pajjiz applikanti l-ohra huwa minnu li shubija` fl-UE hija domma ta` fidi. Lesti jhallsu l-prezz ikun xi jkun biex jissalvagwardjaw is-sovranita` mheddha taghhom.

Dan kollu ma jghoddx ghalina. Is-sovranita` taghna mhix mheddha. Pajjizna mhux maqsum bhal Cipru. M`hemm l-ebda biza li ninhatfu mill-gdid mill-influwenza Russa. Mela ghalfejn il-Prim Minsitru qed jirraguna bhal l-ohrajn u ma jaghrafx li s-sitwazzjoni f`pajjizna hija differenti`

Pajjizna ghandu ghazla. It-triq tas-shubija mhix l-uniku triq. Hemm ghazla ohra , dik li ninnegozjaw rabtiet specjali li jirrispettaw r`rejaltajiet ta` pajjizna.

Min irid icahhadna min dan id-dritt tal-ghazla mhux qed jahdem fl-interess ta` pajjizna ghax dan id-dritt tal-ghazla hu parti mportanti mill-process tan-negozjati anke jekk il-gvern genwinament jemmen li t-triq tas-shubija hija l-ahjar wahda. Ma tistax tinnegozja tajjeb jekk tiddikjara minn qabel li ma ghandekx ghazla ohra.

Fil-fatt qed naraw li s`sissa mhux negozjati qed isiru. Qed isiru ezercizzji ta` sottomissjoni ghal dak kollu li Brussels iriduna naghmlu. Ghalhekk qed niftiehmu maljar ghax ma mmeruhom f`xejn. Nghidu iva ghal kull ma qed jordnawlna.

Biex il-poplu jaghmel decizjoni ghaqlija irid mhux biss jifhem it-tajjeb u l-hazin tas-shubija izda jrid jifhem il-merti u demerti tat-toroq l-ohra. Jekk il-Gvern ma jridx jaghmel dan naghmluh ahna l-Laburisti billi naraw l-esperjenzi ta` pajjiz bhal l-Isvizzera, in-Norvegja, L-Islanda, l-Lichtenstein, Andorra, Monaco u ohrajn li ma jridux ifittxu shubija.

Sadanittant qed tkompli tikber il-probabbilita` li din l-ghaggla kollha tal-Gvern hija kollu ghal xejn. L-EU ma tistax tilhaq il-kompromessi mehtiega biex jinbidlu r-regolamaneti nterni qabel ma jsir it-tkabbir. Jidher li l-presidenza Franciza li ser tiehu t-tmexxija minghand il-Portugizi ma ghandhomx l-intenzjoni li jniggzu wisq biex dawn id-decizjonijiet difficli jittiehdu sa l-ahhar tas-sena.`

Iz-zmein ikarkar u llum hija haga kwazi certa li qabel is-shubija u forsi wkoll qabel ir-refendum trid issir elezzjoni generali. L-anqas haqq l-ghaggla li qed iggib tant incertezza ghal xejn.

Deep and Wide

The Malta Independent

Deep and Wide

It will not be long before realisation reaches Brussels that in trying the simultaneous exercise of widening and deepening the EU,` they are trying to catch the wind.

The suggestion of restructuring the EU into some form of two-tier model, though officially still shunned by the` Brussels Commission that covertly favours a federalist model, is being heard with pronounced repetition from respected quarters.

Indeed if political convenience demands embracing former communist countries within the EU fold, it is totally impractical to expect these countries to absorb the whole corpse of the acquis communitaire in a short time prior to membership anywhere near the next 5 years.

Poland on its own would absorb so` much funds from the EU budget to finance its huge agricultural sector that it renders it inevitable for the Common Agricultural Policy (CAP) to be re-designed prior to enlargement. This is a very delicate area where Governments of current members states that` mean to retain their domestic political support would be hard put to come to terms with such an instant` re-definition of CAP.

On the other hand enlargement without including Poland in the first wave would defeat the political argument that underpins` the EU`s eastwards enlargement in the first place.

Something will have to give. And if the Danes will vote against the referendum for including their country in the Euro-zone when they vote on 28th September then a de facto two-speed EU would start to exist.` Opinions polls in Denmark are showing that what started as a safe referendum for the Danish Government that is promoting the inclusion of the Danish Kroner in the EMU, is now assuming great air of uncertainty. Opposition to `euroising` the Kroner is gaining the upper hand in recent opinion polls.

If the Danes vote no it is unlikely that that Sweden and UK would vote in favour or that indeed the matter will be brought to a referendum in these countries anywhere in the near future.

The creation of a two speed Europe would solve many of our extreme positions in the EU debate. Whether it would be called second-tier membership, limited membership, special arrangements or Switzerland in the Mediterranean essentially they are all variants of the same theme.

A development like this could facilitate congruence of` our two political schools. They could both claim victory;` one for some sort of membership the other for non-full membership!

Alfred Mifsud

Two Year Flashback

The Malta Independent on Sunday

Two Year Flashback

Two years ago this week was the week that was. The week whose events brought about the unthinkable that `in one way or another changed our lives for better or for worse.

On 3rd June 1998 Parliament voted against the motion presented by the nationalist opposition against the Cottonera project resolution and adjourned for Monday` 8th June 1998 where passage of the government resolution was believed to be a mere formality.

Between the 3rd and the 8th June 1998 hell broke loose. Ugo Mifsud Bonnici, president of the republic was hospitalised with a diagnosis which was not re-assuring. Mr Mintoff who had thus far not uttered a single word on the Cottonera project decided time was ripe to crack his whip and eventually voted against the Government motion which was defeated.

On Tuesday 9th June Prime Minister Sant made his public `press conference` in Vittoriosa calling for Mr Mintoff`s resignation or else. Mr Mintoff would not resign and the else had to happen.

With the sobriety accumulated over two years there are reflections which have to be made. The obvious question is whether it` could` have been avoided. In my opinion the only way it could have been avoided `was succumbing to Mintoff`s demands which were never spelt out specifically but could be `easily inferred.` Mintoff wanted to get the party back in his grips, send all `New Labour` where he thinks they belong and ensure that the country continues to play homage and respect for his undoubted achievements on the scale normally afforded to statesmen after their death.

Mintoff could do this in one of two ways. Either by installing a prime minister` who would succumb to his demands. Or by being `offered` presidency with executive powers superior to those `of the prime minsiter. The sudden illness of the incumbent president made the first week of June 1998 an appropriate time to strike.

It was clear that the price was too high to pay and this in the interest of the nation more than that of the party. The bold decision to go to elections with an unfinished job shows the greatness of Alfred Sant who sacrificed personal ambition in order to save the country from usurpation of power which would have made a mockery of the electoral vote. I know of no other mortal who could have taken this difficult decision so calmly, so resolutely and so consistently as much as Alfred Sant did.

The fact that he suffered a catastrophic electoral defeat enhances the greatness of his decision to consider the electorate as sovereign above all else.` In the run up to the election it is easy to be caught with the fever of thinking that one can pull it through, may be even increase the majority as the electorate would maturely repay the gesture of remaining faithful to its` mandate.

Dispassionate logic however clearly suggests that no government that` inherits a financial mess and tries to address it can win an election after only 22 months. That`s why democracy allows 5 years before being forced to face a new electoral test to allow time for the medicine to work and for recovery to deliver its dividends.

Where does all this leaves us now` Reality is that the events of two years ago is some sort of justice with the nationalists for two distinct reasons. Firstly it is only fair that they are made to shoulder the responsibility and electoral unpopularity of curing the financial mess they created through their over-spending of the 90`s. Secondly it is a sort of settling of accounts for the illegitimate third labour term of 1982 ` 1987 which by the simple rule of mathematics belonged to the nationalists. The same Mintoff who had denied the nationalist their legitimate win of 1981 squared the bill by handing them an unprospected electoral mandate in 1998.

In this sense the 1998 electoral mandate is as illegitimate as that of 1981. They were both engineered by Mintoff against the will of the majority.

To make similarities even more striking this third term (except for a 22 month break) of Nationalist administration is as damned and as hopeless as the third Labour term of 1982.` They are both under a shadow of illegitimacy. They are both being havoced by an inordinate strength of the US$ which is rendering our export industries uncompetitive. They are both marked by the high price of oil. They are both being starved of new foreign direct investment.

And both administrations are being subjected to some of the most crass economic mis-managements of all times.` Labour of the eighties tried to address the unemployment problem caused by the political instability, international recession and an inapporpriate rate of exchange policy,` by inflating public sector employment. The Nationalist third administration is seeking to address the economic structural faults by papering` over them with the extraordinary revenues from ill-conceived privatisations rather than addressing problems at their source.

Third term administrations are notoriously marked by mismanagement which can only be addressed by a new and stable government charged with fresh energy, creativity and free from an accumulation of compromises which an overstay in powers unavoidably brings. Labour called the election following their third term at the very last constitutionally possible date. If comparisons are anything to go by any current talk of early elections is totally misplaced. It takes an Alfred Sant to put the country interest before that of the party and his own.

F'gieh is-serjeta'

Il-Kullhadd F`Gieh is-Serjeta`

Il-kwistjoni tar-relazzjonijiet ta` Malta ma l-UE hija kwistjoni serja.` Minnha jiddependi il-futur tal-pajjiz. Jiddependi kemm ser nigbdu investiment lejn pajjizna, li minghajru l-ekonomija taghna toghtor u titbiel.

Huwa car li c-cokon ta` pajjizna ma jippermettiex zvilupp ekonomiku sostenut jekk noqghodu ndawwru lira biss bejnietna. Jehtieg li nsibu nicca kompetitiva taghna fejn inbieghu il-prodotti u s-servizzi taghna lil pajjizi ohra halli b`hekk naqilghu munita barranija. Huwa biss permezz ta` flus barranin li nistghu nixtru il-bzonnijiet ta` kuljum u l-investimenti kapitali li rridu naghmlu biex nibqghu intejbu il-livell ta` l-ghixien tal-haddiema u l-gens Malti.

Dan jista` jsir fuq bazi sostenuta biss jekk l-ekonomija tattira investiment gdid. Mhux daqs tant importanti jekk l-investiment ikunx Malti jew barrani ghax l-importanti li l-investiment li jsir ikun wiehed li jrendi. Izda huwa fatt maghruf li b`investiment Malti wahdu ma naslux. Ghax l-investiment m`huwiex biss flus.` Huwa sistema shiha ta` negozju li tizgura suq internazzjonali ghal prodotti u servizzi li johorgu mill-investiment li jsir. U dan huwa aktar abbinat ma investiment li jigi minn barra.

Il-Ministru tas- servizzi Ekonomici jhobb jiftahar kemm qed isir investiment gdid.` Jekk wiehed jaghsar dawn l-istatistici jara li dan l-investiment m`huwa investiment gdid xejn. Huwa nvestiment minn industriji li ga qeghdin hawn, bhal ST Thomson, Dowty u Brand, li biex jibqghu kompettivi jridu jibqghu` jinvestu fil-manifattura taghhom. Hafna drabi dan ma jkunx ifisser impjiegi godda izda zamma ta` mpjiegi li ga jezistu jekk mhux ukoll tnaqqis taghhom biex jonqsu l-ispejjez u l-ndustrija tkun tista` tikkompeti fis-swieq internazzjonali li dejjem isiru izjed kompettivi.

Investiment gdid forma ta` fabbriki jew progetti godda li joholqu xoghol gdid huwa skars. U ser jibqa` skars jekk ma nkunux serji fin-negozjati ma l-UE ghax hadd ma jrid jinvesti fil-ghama. Dawk li ga qeghdin hawn ghandhom ghazla limitita u ormaj draw it-tajjeb u l-hazin taghna u tghallmu jghixu mieghu. Izda l-godda le.` Il-godda ghandhom ghazla u m`humiex lesti jaccettaw l-incertezzi li l-politika tal-gvern lejn l-UE qed tohloq.

Il-gvern biex ikun serju jehtieg jaccetta tlett punti kardinali biex jaghti sens ta` direzzjoni lin-negozjati lejn l-Unjoni Ewropeja.` L-ewwel irid jaccetta li tkabbir ta` l-UE mhux se jsir qabel ma dan il-pajjiz jghaddi minn elezzjoni ohra u ghalhekk inutli jaqleb kollox ta` taht fuq jekk imbaghad il-pajjiz jaghzel gvern b`politika alternattiva.

It-tieni li fil-pajjiz m`hawnx kunsens dwar is-shubija fl-UE.` La kunsens fost il-poplu u lanqas kunsens fost il-korp politiku. Minghajr kunsens bhal dan il-pajjiz ma jistax jersaq lejn decizjoni irriversibbli bhas-shubija fl-UE. U ghalhekk bhal frotta li tiehu zmien taghha biex timmatura, inutli, tajba kemm hi tajba l-frotta, li tipprova tiekolha qabel l-istagun taghha.

Fl-ahhar il-Gvern irid jaccetta li hemm toroq ohra li jistghu ikunu aktar addattati ghal Malta minn dik tas-shubija. Issa zgur waqghet l-ghajta tal-gvern li m`hemmx alternattiva.` L-Isvizzeri taw risposta cara. Hemm toroq ohra. Hemm it-triq ta` rabtiet specjali u specifici maqbula fuq bazi bilaterali bhal ma ghamlet l-Isvizzera. Hemm it-triq tal-EEA li ghazluha in-Norvegja u l-Islanda. Hemm toroq ohra. Jehtieg li dawn ma jigux traskurati lanqas mill-gvern stess ghax jistghu jghinuh fin-negozjati anke jekk genwinament jahseb li l-ahjar triq hija shubija.

Jekk dawn it-tlett punti sensibbli jigu accettati minn kulhadd allura` wahedha tohrog is-soluzzjoni. Halli l-gvern ikompli jinnegozja s-shubija izda dan jaghmlu fuq time frame ta` mill-anqas hames snin biex l-ekonomija ma tiehux xokkijiet. Jekk fl-elezzjoni li gejja li tkun test qawwi ta` l-opinjoni pubblika versu l-UE, jirbah il-Partit Nazzjonalista allura l-progett ikun wiehed vijabbli u sostenibbli anke jekk il-partit laburista jibqa` ma jaqbilx.` L-istorja tal-power station ta` delimara hija ezempju car. Jekk jirbah il-Partit Laburista allura ghandna nimxu fuq il-progett ta Svizzera fil-Mediterran li ma jaghlaq bibien ghall-ebda zvilupp li jista` fil-futur jerga jgib fuq l-agenda is-shubija fl-UE.

Sadanittant fis-sentejn tlieta li gejjin l-attenzjoni taghna ghandha tkun fuq ir-riformi kbar li hemm bzonn biex timmodernizzaw lil pajjiz u mhux nibqghu nistennew id-dixxiplina, id-direzzjoni u l-fondi fantazmi ta` Brussels.

Quick Surrender

The Malta Independent

Quick Surrender

Lost as they are on their one way regardless approach towards EU membership, the euro-philes were caught totally unprepared for the true significance of the Swiss EU referendum vote for a special relationship with the EU as embodied in 7 bilateral agreements.

A month before I started preparing for the referendum result in my weekly writings in KULLHADD by explaining my vision of `Switzerland in the Mediterranean concept urging Labour to fleshen up its own vision rather than leaving it as an inanimate slogan.

My writings shifted the euro-phile`s criticsim of the Swiss Model 180 degrees. From saying this was an abstract, far-fetched and unrealistic model they said that this would bring about all the burdens of EU membership without its many benefits.

In doing so the euro-philes committed two grave errors. Firstly they admitted that the Swiss model is neither isolationist nor unrealistic.` Secondly and very incorrectly they argued that the Swiss agreements had all the burdens of membership without any of the benefits.` Such reasoning is either the work of the uninformed or the deceptive, or both.

In their very large majority the Swiss have` no appetite for membership. However, they overwhelmingly endorsed the special relationship.` The benefits are strikingly clear. Whilst through these agreements the Swiss started` moving very cautiously towards free-trade area with the EU not only in goods and services, which largely already exists,` but also in state contracting and freedom of movement of persons, they kept intact their neutrality, their freedom to model their financial services industry differently from the EU, protected their strategic agricultural sector and reserved the freedom to trade freely with the rest of the world without the shackles of a customs union. They also kept the freedom to opt-out of the agreements!

This tangible example of the Swiss agreements has` shifted the local debate from a mere yes , no or I don`t know to the EU membership option to realisation of the existence of another option which has its own` merits and de-merits.` Only by doing so can we start having an informed debate on such an important issue finally leading to an informed verdict in the eventual referendum.

Whilst the electorate is warming up to the Swiss option our so ` called` negotiators are merely going` through the motions of accepting whatever Brussels throws at them. No wonder we are closing chapters faster than anyone else. Negotiations need time. Surrender is quick!

Alfred Mifsud