Commission issues specific recommendations for Malta

In February this year, the Malta Country Report was published followed by the National Reform Programme presented in April.

The European Commission has now published the Country Specific Recommendations (CSRs) for each and every Member State, including for Malta.

The report says that the employment rate in Malta, now above EU average, is still increasing but the gender employment gap remains the largest in the EU.

It also states that the relevant country-specific recommendations have been addressed in the programming of the European Structural and Investment Funds (‘ESI Funds’) for the 2014-2020 period.

On healthcare, the report states that measures to decentralise services from hospitals to primary care and to improve the provision of long-term care services are ongoing with current plans to expand the capacity of public hospital outpatient care can help in tackling long waiting times for certain specialties. Nevertheless, other measures to reduce unnecessary referrals to specialists and redirect inappropriate use of emergency care to outpatient have so far not been fully used.

On the services sector, in particular, the size of the financial and the gaming sector, the efforts to attract crypto-currency operators require an effective anti-money laundering enforcement. However, the report does underline the fact that the expansion of the services sector contributed to fuel economic growth.

“The proportion of innovative enterprises is still lagging behind. Research and innovation performance need to be strengthened by smart specialisation so that this may contribute to growth in productivity.”

According to the report, Malta also needs to promote the shift towards a more sustainable and resource-efficient economy, for example by investing in the untapped potential for energy efficiency and renewables, water-management cycle, waste management and sustainable mobility that will contain emissions from road transport. Due to limited transport and commuting alternatives to driving as well as high car penetration, road congestion is one of the weakest aspects of Malta’s business environment and remains a major challenge.

As for the education sector, although Malta invests relatively high amounts in education and training, this is not yet reflected in better outcomes for all. The investment strategy would benefit from further focus on correcting social disadvantage, to be in line with the Social Pillar principle on quality and inclusive education. Despite measures to tackle early school leaving, the rate is still one of the highest in the EU.

What the Commission suggested to Malta
1. Ensure the fiscal sustainability of the healthcare and the pension systems, including by restricting early retirement and adjusting the statutory retirement age in view of expected gains in life expectancy.

2. Address features of the tax system that may facilitate aggressive tax planning by individuals and multinationals, in particular by means of outbound payments.

Strengthen the overall governance framework, including by continuing efforts to detect and prosecute corruption. Continue the ongoing progress made on strengthening the anti-money laundering framework, notably regarding enforcements. Strengthen the independence of the judiciary, in particular the safeguards for judicial appointments and dismissals, and establish a separate prosecution service.

3. Focus investment-related economic policy on research and innovation, natural resources management, resource and energy efficiency, sustainable transport, reducing traffic congestion and inclusive education and training.

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