Category: Archive – 2011

Ueapme Working Group on SME Finance met in Brussels this week. Participants agreed on the main policy lines to take on the Capital Requirements Directive, warning that the risk weight for SME retail loans should be reduced right away, rather than after a review of the new directive as suggested by the European Commission.

Our experts also welcomed the agreements to tackle the crisis reached by the European Council and the Euro zone Member States, in particular on bank recapitalisation, as the texts mention the need to maintain the credit flow to the real economy. SME lending must not be affected, all participants demanded.

The Working Group was also updated on the EC plans on SME finance, which are largely in line with our demands for more attention to mezzanine finance and to instruments capable of increasing the SME lending capacity, although the details remain sketchy for the time being.

Finally, participants received updates on State Aid and on the Single Euro Payments Area.

During a meeting of the Board of Directors, Mr Loek Hermans re-signed from his position of President of UEAPME, the European craft and SME employers' organisation. Mr Her-mans cited his impossibility to continue with his mandate and perform his duties and plans.

The Board of Directors agreed to nominate Vice President Gunilla Almgren as Spokesperson of the Board for the remainder of Mr Hermans' mandate, until 31 December 2012, to assure no gaps in leadership at UEAPME. This decision was unanimous and will have to be confirmed by the next General Assembly of the organisation on 28 November in Brussels.

Gunilla Almgren is an entrepreneur in the sanitary fittings industry. She presently serves as First Vice-President of the Board of Företagarna, the Swedish Federation of Private Enterprises, a position she has held since 2002. She also sits in the Board of several Swedish business-related organisations as well as private companies. At UEAPME, she serves as Policy Vice President for Sustainable Development.

On top of her professional engagements, Ms Almgren has also actively participated in several committees and working groups set up by the European Commission in the past years. She is also the representative of Företagarna in the SME Group at the Swedish Trade Council. Ms Almgren holds a Diploma in Business Administration from the IHM Business School and speaks English, French, German, Italian and Spanish in addition to her mother tongue.

The first international children's festival will be held in Malta between the 14th and 20th November 2011 in different venues in Valletta. The performances are targeting an audience of children and youth from newborn children to 15 year olds.

The festival is under the patronage of the Prime Minster, Dr Lawrence Gonzi and the organisation is entrusted to St James Cavalier, Centre for Creativity. The aim of the festival is to showcase the performing arts in their various disciplines, specifically designed for children, at a level of excellence. The target outcome is to deliver artistic excellence within a fun and engaging context.

This festival showcases 20 different companies giving over 100 performances and workshops targeting an audience of 20,000. The lineup of performing companies hail from Scotland, England, France, Netherlands, Germany, Italy, Portugal and Malta.

All performances are open to the public for free.

The festival website will be up and running in the coming days: http://www.ziguzajg.org/. Adverts, banners, web banners, Facebook, etc will be out shortly.

Shops Participation

The shops project consists of 22 students from MCAST Art and Design in an advanced stage of training, who will be working in partners on shop displays. The aim is to do up the shop windows using the materials that the shops sell, so as to promote the materials but also produce a creative display. GRTU urges shop ownwers to participate. Anyone interested is invited to call on 21 232881 and ask for Ms Carmen Borg or email on by not later than Tuesday 1st November 2011.

Besides travelling to various venues around Valletta, audiences will also be gathering close to City Gate for the Street Art Project and close to St George's Square for the multi sensory installation. There will also be four flash mobs on Saturday and four on Sunday taking place in Republic Street and Market Street, along with a creative culinary project at City Pro Cafe in Market Street.

Hope this information gives a clearer idea of what is happening in the streets and the festival in general between the 14th and the 20th November 2011.

On 27^th September 2011, Malta signed a Memorandum of Understanding on the implementation of the Norwegian Financial Mechanism 2009-2014 with the Kingdom of Norway.  This mechanism aims to strengthen relations between Norway and the Beneficiary States (in our case, Malta), where enhanced cooperation will contribute to securing a stable peaceful and prosperous Europe, based on good governance, democratic institutions, the rule of law, respect for human rights and sustainable development.

Such Financial Mechanism supports projects implemented in the various Beneficiary States targeting a wide range of priority areas.  For the 2009-2014 period, the Norwegian Financial Mechanism will be targeting six priority sectors.  One of these priority sectors is Decent Work and Tripartite Dialogue under which the Fund for Decent Work and Tripartite Dialogue is being launched through this call for Project Proposals.  Innovation Norway (IN) is the Norwegian entity engaged by Norway to operate this fund.

The Fund for Decent Work and Tripartite Dialogue was launched amongst all Beneficiary States on 20 October 2011 and will focus on the following two main areas/priorities:

• Improved social dialogue and tripartite dialogue structures and practices
• Enhanced understanding of the benefits of decent work

The focus of the Programme is to promote the decent work agenda and foster the tripartite dialogue. By improving this dialogue the social partners in each country will better contribute to a more sustainable economic and social development. The Programme will also increase the bilateral cooperation with Norwegian partners.

Eligible applicants are the social partners, public authorities and organisations of public authorities, constituted as legal entities in the Beneficiary States and in Norway with regular activities related to decent work and/or tripartite cooperation. The term social partner means organisations representing employers or employees.  Entities at national, regional and local level are eligible.

Project partnerships with Norwegian social partners, public authorities and organisations of public authorities with regular activities related to decent work and/or tripartite cooperation are encouraged, but not compulsory. Norwegian legal entities cannot apply directly as Project Promoter, but must apply in partnership with an entity from a Beneficiary State.

Interested applicants can contact GRTU for the documents, as well as all relevant information about the Fund, can be found via the following link: http://www.decentwork.no/. 

The deadline for submitting applications (electronically only) is 12.00p.m. local Norwegian time on Saturday 31st March 2012.  [Note: project applications will be accepted as from January 2012 when the electronic application form will be made available online]. 

Following the interesting initial of the Secretariat for Small Businesses to launch the Intrapriza Malta initiative and the greater effort by Malta Enterprise to inform the small businesses owners' community of the various EU funded schemes now in operation in favour of small enterprises, GRTU conducted a survey among a cross section of small businesses from various economic activities.

GRTU issued 250 questionnaires and 120 of them were responded. The comments quoted are among the most striking and grouped. The results of the survey conducted during the Intrapriza Malta week are below. 

Commenting on these results Mr. Vince Farrugia, Director General GRTU says, "We are not really surprised as the way these EU funded schemes are being sold still leaves a lot to be desired. First of all though substantial sums are being put available as loans and as guarantees the authorities are failing to understand two crucial problems. First of all that long period of recession and poor growth has had a terrible cash flow effect on many businesses as they retained their level of operations including labour content even as gross private consumption went down and receipts from sales fell down and secondly as they plan to re-emerge, expand and move to new projects most firms are caught in a banking trap. Saddled as they are with loan payments on previous loans and large overdraft and therefore the space for new loans simply do not exist. The schemes now available do not cater for this kind of problem. Indeed they specifically deny the option of financial re packaging for firms who want to move further in spite of the strains imposed on their financial commitments by the recession. This situation was remedied where exporters were involved but not for small firms working on the local market who together employ 40% of Maltese labour. GRTU is in fact making new proposals for Budget 2012. Which address this acute problem in a very clear way."  

Report replies and main comments:

Schemes applied for:

• ERDF International Competitiveness Grant Scheme
• Equal Project
• MTA & ETC
• EAP Scheme
• Jeremie Loan BOV
• Micro Invest
• Employment Aid Programme
• Marketing for Export

Schemes which could be of interest:

• Marketing & Training
• Schemes for Training new workers
• Schemes for IT Development
• Schemes for importing and exporting medicines
• Purchase of equipment for film production
• Expanding Operations
• Tax rebates
• Photovoltaic Schemes
• Software Investment
• Help in employees wage

Why are business owners not interesting in applying:

• Lost faith in Malta Enterprise
• Not worth the effort to apply
• Some sectors have limited sales
• Not much benefits
• SME s are abandoned
• A lot of forms to fill when it comes to applying, no info
• No help for importers

A multi flag LPG Gas Distribution system has been put in place early last week for a calendar month, time enough for Government to decide on the future of this sector once and for all. This means that distributors will have both Liquigas and EasyGas cylinders on their vehicles for their daily rounds and it is up to the customer to make a final choice. The Malta Chamber of Small and Medium Enterprises , GRTU, has for the last ten months worked hard with other stake holders to find a solution to this issue. It is the prerogative of Government to take a decision which protects the livelihood of the gas distributors unless of course it decides to compensate all distributors to the tune of 6 million euro which is quite unlikely at this time.

The distributors themselves want work and more of it. Of course GRTU cannot hide the fact that over the last three years, it was the Malta Resources Authority who with a clear mind decided to create one of their largest blunders to date. Issuing two Authorisations to two different companies with conditions placed on the dominant market leader in this industry only, was not the right way to do this. Today we are reaping the fruit of what MRA has sown..

Today , Government is duty bound to set this blunder right. The leading market player, Liquigas has made substantial investment in Malta. Liquigas is obliged to guarantee security of supply both in respect to quantity and also in respect to the amount of cylinders available in the market. Security of supply is imperative for this island.

However the issuing of the second Authorisation to Easygas Malta Limited by the Malta Resources Authority left much to be desired. The ownership of cylinders was not addressed by MRA whilst issuing the said authorisation. No reasonable conditions were made. And the conditions made were to be abided to after the authorisation was granted. And the result is still unsatisfactory. Liquigas claim that Easygas are making use of their cylinders, cylinders which according to them are their assets, their sole assets. So if these cylinders are their assets, how come MRA , the regulator, sits pretty and allows the current market situation to deteriorate.

The rightful owner of an LPG cylinder has to remain its rightful owner. There is no bending the rule here and MRA or Government would do best to put their house in order. Mine is mine and yours is yours!

The future in gas distribution lies in providing a service to the public where we respect our environment, have less distribution vehicles on the road, and more accessibility to the provision of LPG cylinders, tested and guaranteed under safety provisions as requested by law. We cannot allow a situation where because of the term competition, we allow four or five vehicles honking around each area to sell LPG cylinders. And competition is really very restricted since the price is fixed by MRA. LPG cylinders are not bars of choclate or early morning oats!

The time is now ripe for the mistakes of the past to be rectified. Government needs to have the courage to change them now . The sooner the better.

Addressing the Employers Group at EESC in Brussels on the eve of the final decision by the EU Council on the new financial support package for the Euro, Vincent Farrugia Maltese employers representative at the European Economic and Social Committee addressed the importance that the EESC as the forum according to the Lisbon Treaty representing Civil Society and the Social Partners stand strongly and eloquently in support of the Euro. The Euro is not a monument distant from the citizens of Europe.

The Euro is the money in our pockets, it's our life savings, and our Bank accounts, all our work, efforts and life and business plans are expressed in value in terms of Euro. Defending the Euro is not just the politicians jobs.

A lot of the trouble is not merely financial and structural but it is also psychological. All the attacks and exaggerated comments on the Euro do not faithfully reflect the true state of the economies of the EU and the Economies of the members of the monetary union. There are deficiencies and the mechanism has not really been put in place in the past to ensure that a crisis is averted. But we've seen financial crisis hitting other currencies. We remember the Sterling crisis, the Dollar crisis and the many crises of many other lesser currencies. Economies continue to grow if the underlying economic factors are right and there are many indicators to prove that the underlying economic factors in the EU are sound and with the right. Financial package and with the right mechanisms including a fully fledged European Central Bank the Euro should not be in trouble. But we must speak up in favour of the Euro. The negativity that we have heard this last year especially with so many commentators and debates where everyone irrespective of any absence of capabilities regarding the subject in matter shoots solutions and conclusions most of them not only impractical but verge on the illogical and the not enforceable.

"The leaders of Europe are now closer in agreeing on stronger and effective solutions to the problems affecting the Euro but we must speak out also. This is our currency. This is our money. This is our life, our future. Let us all make our position very clear, " emphasised Vince Farrugia

Vincent Farrugia Director General of GRTU and EESC Employers Group Bureau Member participated last week in the high powered Trade related Seminar on Europe, Trade and the wider world held at Clifford Chance, London. Keynote speakers in the Seminar were Profs. Stephen Woolcock – Director Entertainment Trade Policy Unit, London School of Economics, Oliver Wieck – Director External Relations, Federation of German Industries (DBI), Phillipe de Buek – Director General BUSINESS – EUROPE, Arnaldo Abruzzini – Secretary General of EUROCHAMBRES and Peter Thompson – Director Development and Economic Planning, EU Commission DG Trade and top keynote presentation on behalf of the EU Commission by Ignacio Garcia Bercero – Director Sustainable Development & DG Trade.

Interventions on behalf of the EESC came away from others like Henry Malousse – President of the Employers Group, Jonathan Peel – President WTO and International Trade Permanent Study Group and Brenda King, Eva Paarendson and Stephen Boyle.

Vincent Farrugia spoke on the effect of the impositions by the EU of Current Trade defense instruments: "The EU have the responsibility to ensure through these instruments that appropriate measures are taken against those infringing the rules of fair trade. However, Europe pays a high price for the anti-dumping, countervailing and safeguard measures imposed by DG Trade. Importers, retailers and consumers suffer heavily from costly and unpredictable trade defense actions. A prime example occurred in 2005 when 80 million Chinese shirts, trousers and other textiles were blocked at customs following the sudden imposition of import quotas months after the goods had been ordered. The situation was repeated last year with the imposition of a hefty 75% tariff on imported ceramics when construction contractors order and quote on major projects years ahead of actual deliveries. European retailers and wholesalers have a right to expect the EU to take all possible care to avoid any collateral damage when imposing trade defense measures.

Much more needs to be done to ensure that this collateral damage is avoided in implementing a policy which, to say the least contradicts the EU's strong commitment to free trade and support of this trade initiatives of enterprise in the developing world. Predictably and legal certainty are particularly important for economic operators, especially for SME'S and companies which specialize in a narrow product range. The commerce sector, is by far the largest employer in Europe, must be able to plan ahead on imports without the threat of unforeseen tariff intervention between placing of an order and the arrival of the merchandise at European Borders.

The commerce sector generates 11% annual EU GDP and this contribution must be fully reflected in EU trade policy decisions. The same considerations must also be given to Europe's 500 million consumers' interest in lower prices, product availability and choice must be of primary importance to EU legislations.

Vincent Farrugia appealed to the Commission to:

• Reduce negative practical effects on EU importers
• Enable traders to plan ahead – make measures more predictable
• Reflect and respect consumers' and traders' needs throughout the adopted enforcement procedures
• De-politicize anti-dumping and enhance confidence in investigation methodology
• Implement enhanced transparency throughout the investigation process

Vincent Farrugia also spoke about the importance of highlighting the services sector in all bilateral trade agreements as most after the new emphasis is only on the dismantling of market access barriers for the import and export of goods and not so much of services. As stated in the Monti report on the EU Internal Market, the services sector delivers more than two thirds of EU Employment and GDP and the service sector is the only sector with a positive net contribution to job creation in the EU. The service sector is actually the economic sector where the EU has its strongest comparative advantage.

It is essential for maintaining growth and employment in the EU that priority is given to liberalizing trade in services together with associated areas such as intellectual property rights and Government procurement.

Vincent Farrugia concluded by saying that GRTU Malta's National Organization with the largest and widest cross-section of traders and retailers and SME's in services as members strongly highlights and emphasizes these main key priorities:

• Free trade
• Legal certainty
• Transparency
• Predictability
• Competitiveness
• Consumers
• Less Red Tape

As part of the European SME Week and of the Youth@Work initiative aiming at linking young people and business, the European Commission organised a round table on youth employment last week in Brussels.

Speaking at the event, Social Affairs Policy Director Liliane Volozinskis stressed that SMEs have a keen interest in hiring young people, as they more than ever "race for talents" and face a mismatch between supply and demand of skills.

Lack of competences is a real obstacle in this respect, alongside rigid labour markets and a macroeconomic environment not conducive to job creation.

Although SMEs may not be sought after like multinationals, working for them offers many insufficiently recognised advantages, such as more autonomy, more responsibilities, higher satisfaction at work and better personal development, said Ms Volozinskis, who also highlighted the high level of SME investments in work-based.