Category: Archive – 2009

COM(2009) 83 – Proposal for a Directive and amendment on the annual accounts as regards micro-entities (less than 10 employees)

The Commission is proposing an amendment to Directive on the annual accounts of Micro Enterprises so as to allow Member States to completely abolish financial reporting obligations.

The Commission suggests establishing an option for Member States of relieving them from the requirement to draw up annual accounts The objective of this proposal is to simplify the business environment and particularly the financial reporting requirements in order to enhance their competitiveness and release their growth potential.

Source: MEUSAC Competitiveness and Consumer Affairs Committee

COM (2009) 15 – Communication on the Third strategic review of Better Regulation in the European Union

Over the last four years, the Commission has made significant progress in implementing its better regulation agenda. It is simplifying legislation that is already on the books to ensure that it is up to date and more accessible. To ensure that new legislation and policies are of the highest quality possible, it has rolled out a wide-ranging and ambitious impact assessment system. This Communication reviews where progress has been made and highlights areas where further efforts are necessary.

In its conclusion, the Commission maintains that now that the European Union and its Member States are facing important challenges in addressing the current economic and financial situation, better regulation must remain an essential part of the response – regulating where there is a need to do so, as straightforward as possible, based on dialogue with stakeholders, and in a way that keeps burdens on businesses and citizens to the minimum necessary. The experience with better regulation over the last four years will provide a good basis on which to confront new challenges. The Commission concludes that it has identified next steps which require continued efforts and the on-going political support of the other European institutions, the Member States, local and regional authorities, and stakeholders.

Source: MEUSAC Competitiveness and Consumer Affairs Committee

GRTU has last week presented its position on the revision of the waste management strategy to the Minister for Resources and Rural Affairs, Hon George Pullicino.

On this particular occasion, the GRTU's Director General, Vincent Farrugia explained that behind the presentation of this document, there stood different GRTU sectors. The feedback was drafted following numerous meetings during which the consultation document was being distributed these different sectors, including waste carriers, skip operators, excavation constructors and other related construction operators.

In its presentation GRTU explained that it believes that the construction of another incinerator in our country is to be considered as a last resort as this is considered as the least means of waste elimination.

The document also refers to the necessity, now more than ever, of involving the private sector in order to minimize the extra burden we have at the ‘waste serv'. Vince Farrugia emphasized that for the GRTU the private sector is currently in a position by which, through authorized schemes, it can actually take care of  large parts of the waste that is being generated. It is however time that such authorized schemes are given authorisation to operate and Government has to put an end to its income from the Eco-contribution on various things.

The document further comments and explains about the collection of the mixed and separated waste from Local Councils. In this regard the GRTU has held various meetings with the Local Council Association, and it is through the co-operation between the GRTU and the local councils that a plan was designed on how this can take place. A more efficient a different plan from what the consultation document is suggesting.

Vince Farrugia explained to Minister Pullcino that GRTU's document speaks about the problem relating to animal waste, which until now is not being neither collected nor treated according European Directives. The GRTU has therefore also presented a recommendation to the Minister about different means on how this could be done between the parties involved.

The GRTU's Director General also held that in this document GRTU continues to show its maturity in giving its constructive criticism and further extends its collaboration and support of both the organization and their members so that in a plan of ‘preferred strategic partnership', Malta will have an efficient waste management strategy of less burden to enterprises whom are the basis of the Maltese and Gozitan economy.

The Director General on behave of the local councils thanked Minister George Pullicino for the way he, his Ministry and the ‘waste serv' are effectively consulting GRTU.

He then presenting GRTU's position and stated that GRTU is working hard to ensure every Government document has been studied by the GRTU members before a final stand it taken.

The GRTU is available to continue discussions with Government and the authorities concerned with the outcome and implementation of this revision.

 

 

"This is an increase that has been long in the air and it reflects the high cost of operations to have a fully functioning bottling plant in Malta. Unfortunately the liberalisation of gas provision have taken too long so consumers are having also to cover the cost of the gross inefficiencies in the local bottling plant.

GRTU has insisted all along with Government that the subsidy which is permissible under EU regulations should not be removed at one go. As the consumer cannot support both a high increase in gas and the maintenance of the current high level of electricity tariffs. GRTU has successfully intervened that the increase in gas prices is not as hefty as originally indicated but we feel that the timing of the increase is very bad and Enemalta should have first waited for consumers to benefit from reduced of electricity tariffs before introducing these increases.

GRTU is also critical of Malta Resources Authority as once again they have not insisted on an Economic Impact Assessment of these gas increases.

Once again MRA is dominant by its absence. GRTU strongly believe that establishments that are heavy users of gas are being additionally penalized at a time when as a result of an economic recession they are having to sustain their present level of employment through vanishing profits. Once again the timing of an important action is faulty as it does not reflect the current economic situation. Enemalta is a state corporation and the regulator, MRA should be more conscious of what consumers and business users can afford to pay".

 

By Vince Farrugia

One striking feature of the recession that is now hitting practically all economies is the speed of the follow through from the banking crises that in September sent financial centers in an unpredicted down-ward spin, to the real economy. Normally financial events take a lot longer to affect growth and longer still to hit employment.

This time however in most industrialized countries the effect has been instantaneous. The smaller economies like Malta that did not suffer from the financial crisis in any dramatic way, suffered soon after as the impact on employment and earnings in the major economies, on which markets the smaller economies depend, rocked them to an unsustainable degree.

 

The near meltdown of the banking system hit credit particularly trade credit – hard and walloped confidence all over the world. This time round it was not just the USA, Japan or Great Britian, but all the major economies. Business behavior changed immediately as the trade credit crisis hit major businesses hard and in real time.

The impact on businesses such as manufacturing, major industries and service providers that together employ the millions was much more rapid than the impact on consumer behavior. The impact on consumer behavior came soon after. As the consumer credit crunch hit hard, people lost their jobs and their homes and everything around began to bear the impact of the crises. Here in Malta we only read about it and for most people it was something that affected others.

When I literally screamed on Budget Day that we were not bold enough and that we were not realizing how deep this recession was going to be, some promptly criticized that I was too negative. Unlike many people however I have lived through previous recessions holding important posts with great macro-economic management importance and I know perfectly well that the question of a world recession rebounding in little Malta was one of a few months before orders for exporters and hoteliers drop dramatically.

I also had the experience of how to defend our entrepreneurs. Most of our firms, exporters, tourism operators, Freeport, service providers and the others that depend on them as the leaders that bring the orders from abroad and all others that supply them to help them deliver to an overseas client, are essentially strong but not so resilient. The weakness of most of our firms is their weak capital structure. They are incapable to withstand an extended period of low activity and unless financially relieved by big brother, the state, they simply would not be able to survive a long recession in world markets. I urged government strongly to act on an enterprise by enterprise basis helping firms not only to live through the recession but to compete even in a deflationary market were prices for manufactured goods and for hotel beds were being dumped.

This is now happening. Not as much as I would like, as an economist and as Director General of GRTU, but enough not to let the recession swallow us. We must keep our seatbelts fasted as the economic tremor is still wild.

What many out there believed, up to November, that this time round, given the world experience of handling recession, it will be a mild recession. I think some brainchilds in Malta also thought so. They would not have predicted in November that the Maltese economy would in 2009 grow by 2.5% and advised the Minister of Finance to include this as a basis for his Budget 2009 predictions. But we all now know the prospects of a mild recession turned into the reality of a deep one.

How deep and how long? The International Monitory Fund is very pessimistic on the economic growth prospects of many major economies. Next month IMF will give us a proper update for all major individual European economies. This will help us assess the impact on the European Union economies and on smaller economies like Malta and could help us define better the time scales for revival.

In the meantime we can get some ideas from historical evidence. Paul Ormerod the leading economic historian of Valterra consulting last week published a paper that analysed all recessions hitting advanced economies since 1871. A total of 255 recessions were registered between 1871 and 2007. Each recession has been defined as an episode in which gross domestic product falls from one year to the next.

It is interesting that Paul Ormerod says that most recessions end quickly. 64% of recessions suffered only a single-year GDP fall. Next most common, 23% were two year recessions. Three year recessions are rare but they happened 20 times, just under 8%. Four year recessions occurred only 6 times, 2% of all recessions. There was one example each of a six year and a seven year recession.

Recessions are generally self-correcting as they are usually cyclical. Firms feel the world is in a good economic and consumer confidence is high, they over produce and they over order raw-materials and some manufactured goods and services (these are the kind of orders on which Maltese firms live or on which the Maltese economy depends), when recession hits, they are forced to cut back, supply demand out of stocks (inventories). Production cutbacks drive the economy into recession and only when stocks are so low that firms start producing again do we come out of it.

There is an element of all that in the current global recession, through as many leading economists point out, it is essentially the product of two big shocks suffered by major economies: the credit crunch and last year's oil and commodity price surge.

The good news is that the recent G20 gathering of Finance Ministers and Central Bankers resolved on a commitment by Central Bankers to explore further ways of boosting their economies by unconventional measures. This is really a commitment to boost the money supply by extraordinary measures. Most Central Bankers are normally terrified of this as such measures lead to an immediate surge in inflation and this could be counter productive.

Most leading economies are in a deflationary spiral, that is, prices are falling and inflation is negative (Malta is one of the very few countries where inflation keeps rising!) so implementing what the economists  call quantitative easing – printing of money-is an unprecedented action that will push economies without  danger of  immediate inflation.

In America where the Federal Reserves Board approved monetary interventions will move America's deficit to 12% of GDP. The economy is receiving boozes of unprecedented size and form. President Obama now predicts that by borrowing trillions (millions of millions) to fund his government economic stimulus package, the American's economy will soon be growing at an annual rate of about 4%. America is facing the challenge. They are showing that they are not afraid to shoulder their responsibility to lift the world out of recession sooner than later. This resolves for sure and will bear results. We will be out of recession sooner than many predicted. Here in Malta we need to hold tight. Government needs to intervene more. The Central Banks need to be more courageous.

MFSA needs to hold the Banks tighter to manage the availability of credit to enterprise better. Tightness of credit and a squeeze on accessibility of funds to business will lengthen our recession. The Opposition in Parliament needs to grow up and stop simply criticizing. They must join forces with Government and with the business community to help the nation sail through a very difficult period. If we act together, and smartly, little Malta will also be out of it in a shorter period than the professors of doom are predicting.

 

Member States have voted in favour of a European Commission proposal to introduce compulsory origin labelling for virgin and extra virgin olive oil.

Rules introduced in 2002 established optional labelling for these oils, but this proved insufficient to avoid consumers being misled about the true characteristics and origin of certain products. As a result of agricultural traditions and local extraction and blending practices, such oils may be of quite different taste and quality depending on their geographical origin.

For this reason and in line with the traceability rules of European food law, the time has now come to introduce compulsory origin labelling for virgin and extra virgin olive oil.

Oils originating from just one country will carry the name of the Member State, or of the third country or of the Community. Blends will be labelled either "blend of Community olive oils", "blend of non-Community olive oils" "blend of Community and non-Community olive oils" or equivalent information.

In addition certain terms such as 'fruity', 'green', 'mature', 'mild' and 'well-balanced' – which have recently been defined by the International Olive Council – may also be used on virgin and extra virgin olive oil labels for oils complying with the definitions.

The new rules will apply from 1 July 2009. However, products which have been legally manufactured and labelled in the Community or legally imported into the Community and put into free circulation before 1 July 2009 may be marketed until all stocks are used up.

Source: MEUSAC Agriculture and Fisheries Committee

On the 17^th of February, the European Parliament's Environment Committee and energy experts from all EU countries approved a proposal by the European Commission to gradually replace incandescent light bulbs. 

Old fashioned and energy inefficient light bulbs will be phased out for a new generation of bulbs that consume 75% less energy.  This means that the wasteful bulbs will disappear from shops between 2009 and 2012. 

Traditional light bulbs are wasteful of energy with just 5% of the electricity going into the production of light and the other 95% producing heat.  These bulbs are now considered a luxury, given the pressing issue of climate change and the EU's stated goal of a 20% cut in CO2 emissions by 2020. 

Source: MEUSAC Environment Committee

COM (2009) 93 –  Proposal for a regulation concerning a multi-annual recovery plan for bluefin tuna in the Eastern Atlantic and Mediterranean

In order to rebuild the bluefin tuna stock, the new ICCAT recovery plan provides for a reduction of the total allowable catch TAC level until 2011. In fact, the TAC for Community vessels in 2009 has been reduced to 12 406 tonnes, as compared to 16 210 tonnes in 2008 and will eventually decrease further to 11 237 tonnes in 2010 with a reduction of 30% over two years.

 

On consideration of rebuilding the stock, it refers to restrictions on fishing within certain areas and time periods, a new minimum size, measures concerning sport and recreational fishing activities, measures to address fishing and farming capacity as well as reinforced control measures and the ICCAT Scheme of Joint International Inspection to ensure the effectiveness of that plan.

The purpose of this proposal is to transpose in Community law the ICCAT recommendation establishing a recovery plan for bluefin tuna in the Eastern Atlantic and Mediterranean. Nonetheless, this regulation is laying down the general rules for the application by the Community of a multiannual recovery plan for bluefin tuna recommended ICCAT.  The main elements of the revised recovery plan, besides the immediate reduction in TAC, are:

Reduction in the fishing season by 4 months for purse seiners (15 April-15 June).

Fishing capacity shall be immediately frozen at 2007-2008 levels, followed for the first time by a plan to reduce it to bring into line with national quotas.

Farming capacity in 2009 not exceed the max authorised annual input over  2007-2008, and in subsequent years the capacity will be further reduced.

An ICCAT regional observer project will be established to ensure 100% observer coverage for all purse seiners over 24 metres, all purse seiners involved in Joint Fishing Operation, and during all transfers to and harvesting from cages.

Video records of fishing and farming operations made by operators must be available to observers and inspectors.

Market measures are strengthened, in particular by banning import and export operations for all bluefin tuna for which there is no quota, either at national or individual vessel level.

National fishing plans to ensure fishing effort is limited in line with quota, and all boats over 24 metres will be allocated individual quotas.

Specific quotas for sports and recreational fisheries, counted against national quota, and subject to catch reports.

A rigorous framework for the control of Joint Fishing Operations.

The removal of the minimum size derogation for pelagic trawlers in the Atlantic, and a reduction in general minimum size derogation.

Transhipment at sea will be only possible in designated ports.

Tuna may not be transferred to farms without prior authorisation of the flag state of the catching vessel.

ICCAT will give its members the opportunity to present their compliance record for review and comment by all members of the organisation under the new compliance system. Failure to comply with a range of essential conservation and management measures and lack of meaningful monitoring, verification and enforcement measures, may lead to the immediate suspension or reduction of quota.

Non-compliance with farming and fattening measures may lead to a marketing ban. The ICCAT Committee of compliance will meet in Barcelona on 24-27^th March to assess the compliance of the Contracting Parties with the measures already implemented in 2007 and 2008, in Marrakech last November.

Source: MEUSAC Agriculture and Fisheries Committee

The Common Fisheries' Policy was under scrutiny on Tuesday, 10^th February 2009 at a public hearing in Parliament about its future shape.Commissioner Dr. Borg said, "A new policy must be effective, simple and easy to administer" and have a "regional dimension." "We need a common policy where all European fisheries are based on the same principles of ecological, economical and social sustainability. Only then can we be sure that fisher's throughout the EU, from the Baltic to the Mediterranean operate on a level playing field. But at the same time, we have to acknowledge that our seas and fisheries are so rich because they are so diverse."

Some MEP'S were even concerned about the input if Iceland joins the EU and if they would ask for an opt out of the fisheries policy, However, Commissioner Dr. Borg said that since fisheries is a ‘common' EU policy, it would not be able to opt out.

The hearing was aimed at drawing opinions on reforming fisheries policy. Eventually the Parliament and Council of Ministers will ultimately vote on the future shape of any fisheries policy.

Source: MEUSAC Agriculture and Fisheries Committee