European Commissioner for Employment, Social Affairs and Inclusion László Andor, here on a two-day visit, is positive on Malta's current job situation.

"There's good confidence here," Dr Andor told the press after a brief meeting with Prime Minister Lawrence Gonzi.

He said Malta's unemployment rate was "very low" and that Malta's workforce, through its flexibility, had adapted to the economic crisis.

The commissioner said business in Malta could benefit from the changes in the neighbouring Arab states.

Speaking at the European People's Party Workers' Group general assembly, Dr Andor said the risk of a double-dip recession would increase, with GDP growth expected to decrease.

He said more had to be done to have young people in employment, which needed a revision of labour contracts as well as less people leaving school early.

"Skills are another area where the EU needs to invest as a matter of urgency," the commissioner said.

"By 2020, 86 per cent of jobs are required to have high-to-medium level of skill," he said, pointing out that there were tens of millions of Europeans who did not have the adequate skills to survive in the evolving job market.

Another important step, he said, was to have higher retirement ages, and less early retirement schemes so that pensions could be sustained and the workforce could be stable.

Less tax on labour and lower-paying jobs should also be considered, the commissioner said.

In his speech, Prime Minister Lawrence Gonzi said that when addressing the market it was important to keep society in mind.

"The human cost of the crisis is being paid largely by those who are out of work, most weak in our society. They are the first to be hit and the last to come out of the crisis," Dr Gonzi said.

He said that Europe could even compete with China in the high-value added manufacturing sector. "Nowadays, manufacturing is done with robotics," Dr Gonzi said, adding that a factory in China or in Malta could do the same job – except perhaps that in Europe, the machinery could be made to be more productive.