Rebuilding a more resilient economy – Alison Mizzi


Immediately after her election as President of the European Commission in 2019, Ursula Von Der Leyen gave a speech on her priorities for the European Union in which she said: “The path is arduous, the task is not easy. But together we can do it.”

Little did we know then that the EU, together with the rest of the world, was about to face unprecedented challenges, leading not only to a change in perspective, but also to the need to rethink and reorient EU priorities to adapt them to the new reality.

Post-Brexit adjustment, surviving a global health pandemic, the effects of climate change and the shock of Russia’s invasion of Ukraine all feature centrally in Europe’s recalibration. It is safe to say that the EU was not ready to face the realities and repercussions caused by COVID-19 and the recent destabilization caused by the war on the EU borders.

The EU single market has been plagued with supply chain disruptions, price hikes and overall disruption to the day-to-day operations of virtually every business providing goods and services.

We now approach the midpoint of the Von der Leyen Commission with some hope of moving beyond the pandemic on the one hand, but still in complete uncertainty about the security situation in Europe on the other. .

As part of the fight against the economic and social effects of the pandemic, the EU approved earlier this year the Recovery and Resilience Facility (RRF), which aims to combat the adverse effects of the health crisis and to work towards recovery through investment in the economy.

Bearing in mind that the RRF was designed before the Russian invasion of Ukraine, which consequently contributed to substantial levels of inflation, it is now more important than ever that these funds are invested efficiently and in a timely manner. timely.

Climate change is a real existential threat whose effects are now being felt at the societal and even economic level. The green and digital transition has therefore been and remains at the center of the EU agenda to achieve the objective of climate neutrality by 2050.

This is particularly crucial for countries like Malta, a Mediterranean island on the periphery of the European continent, facing permanent challenges such as insularity, limited natural resources and a heavy dependence on imports, especially food.

Overseas supply disruptions have a clear impact on pricing and availability locally, as we are currently experiencing. Malta also depends on inbound tourism, which in turn relies on favorable weather and good climatic conditions. While bearing this in mind and remaining fully committed to the broader climate goals, the EU should however not overlook the painful process of business recovery from the pandemic and the economic pressures the war in Ukraine is putting on operators. .

In light of this, it should assess how to reduce burdens on businesses, including those expected to arise from the Fit for 55 package, which is the EU’s legislative framework for achieving Green Deal goals.

Climate change is a real existential threat whose effects are now being felt at the societal and even economic level.-Alison Mizzi

Despite all the variable and unpredictable factors of recent times, there is one certainty that shapes and will continue to shape our future. This is the role of technology and the rapid digitization of the economy. Digitization brings substantial benefits given the economic opportunities and thousands of jobs created, but care must also be taken to ensure that the emergence of new business models operates on a par with conventional ones.

The Von der Leyen Commission has undertaken important EU reforms to ensure that business in the digital domain is done fairly and transparently through several pieces of legislation, such as the Digital Services Act, the digital markets, artificial intelligence law and, more recently, data law.

This is probably one of the EU’s most successful policy areas in this term so far, and more ambitious initiatives would be welcome to ensure economic growth in a rules-based order.

EU trade policy is also a key policy area that substantially contributes to economic growth, but is also unstable in the face of international geopolitical tensions. While benefiting from a normalization of trade relations with the United States under the Biden administration, significant challenges remain.

The EU still faces a largely dysfunctional World Trade Organization, protracted disputes with the UK over the implementation of the Northern Ireland Protocol and frustrations in trade relations with global players such as the China.

A successful EU trade policy is important because it opens up new markets for business, including for Maltese SMEs, with trading conditions that a country with such a market size as Malta would be very difficult to obtain by himself. In this regard, the recent EU agreement on an international procurement instrument, which will open up non-EU public procurement to EU companies, is an important development.

Another important area that is particularly relevant to the Maltese labor market is the supply of high-level skills and the availability of skills more widely. This challenge was present long before COVID-19 and will persist given the rapid digitalization of the economy. At the center of the action plan of the Von der Leyen Commission during the first half of this mandate was the new pact on migration and asylum.

Last month, the Skills and Talent Package initiative followed, which aims to provide more streamlined procedures for companies to look beyond the EU when hiring talent that could not come from the EU. EU.

Looking to the second half of the Von der Leyen Commission’s mandate, one can only hope that the forthcoming policies and legislative proposals will continue to address the EU’s long-term challenges while containing the current economic volatilities. Future resilience can only be guaranteed by a robust economic recovery.

This needs to be supported by public policy measures such as more dedicated European funding, new targeted legislative initiatives, the application of better regulation principles ‒ such as the ‘think small first’ principle ‒ and avoid unnecessary burdens for businesses by applying SME tests at the impact assessment stage.

In addition, consultation with businesses and business representative organizations remains essential to ensure the right economic conditions for operators to develop and create growth, jobs and prosperity.

Alison Mizzi is President of the Malta Business Bureau.

The MBB is the EU advocacy organization for the Malta Chamber and the Malta Hotel and Restaurant Association, and a partner in the Enterprise Europe Network.

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