The Malta Business Bureau on Wednesday welcomed the European Commission’s competitiveness compass as a crucial initiative to tackle the EU’s long-term economic challenges.
The commission hopes the compass will set a path for the bloc to become a place where future technologies, services, and so-called clean products (technologies that contribute to sustainability and care for the environment) are invented, manufactured, and put on the market. At the same time, Europe would be the first continent to become climate-neutral.
The commission believes that over the last 20 years, Europe has not kept pace with other major economies due to a persistent gap in productivity growth. However, it has what it needs to reverse this trend, including an educated workforce, capital, savings, the Single Market and a unique social infrastructure.
On Wednesday, MBB CEO Mario Xuereb noted in a statement that while the competitiveness compass rightly prioritised innovation, sustainability, and economic security, the EU must now fulfil its commitments to deliver tangible benefits for businesses and citizens.
“The Commission’s planned initiatives demonstrate a renewed focus on competitiveness and a welcome shift away from the regulatory burden of the previous mandate.
"By streamlining regulations, fostering innovation, promoting sustainability, and strengthening economic security, the EU can create an environment that enables business to flourish - helping start-ups scale up and allowing established companies to consolidate and expand their operations more effectively.”
Action is now critical, Xuereb added.
“The productivity gap between Europe and its competitors is widening, and the time for action is now. To realise its ambitions, the EU must follow through on its commitments and ensure that both businesses and citizens reap the benefits of these reforms.”
The compass promises it will address key challenges the EU has faced in recent years, including the global pandemic, the war in Ukraine, and resulting economic shocks such as inflation and soaring energy prices.
While Europe has shown resilience, it must now confront deeper, long-term challenges as outlined by Enrico Letta and Mario Draghi in their respective reports published last year on the current state of the European Single Market and European Competitiveness, the MBB added.
These challenges include a widening productivity gap with major global economies, increased reliance on imports of critical raw materials, and the vulnerability of supply chains.
Closer to home, MBB eagerly anticipates reviewing the Omnibus Simplification package - one of the first initiatives to be announced.
"Maltese enterprises are at risk of facing excessive administrative requirements in areas such as sustainable finance reporting and supply chain due diligence.
"This package aims to streamline the recently adopted regulations which are crucial for small businesses operating within broader supply chains."
MBB also looks forward to evaluating a proposal for a new enterprise category for small midcaps.
This will offer tailored regulatory measures for businesses that exceed the SME criteria but remain far smaller than large multinational corporations, as is the case with several Maltese companies, it added.
As the European Commission prepares to finalise and announce its targeted policies and legislative proposals in the 2025 annual work programme this February, MBB urged European institutions to prioritise swift action to bridge the productivity gap, reduce bureaucratic burdens, and enhance Europe’s global competitiveness.