Malta Business Bureau calls for an ambitious EU Recovery Fund

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Highlights the need for financial grants in the revised EU Budget during the first phase of crisis recovery

On Europe Day, the Malta Business Bureau believes that through responsibility and solidarity of all its members, the EU is best posed to provide the right stimulus to bounce back from a deep economic crisis to growth. Only this way can we then refocus on Europe’s long-term common commitments including the transition to a green and digital economy.

In reaction to this crisis, the EU institutions have used all the legal frameworks and funding instruments within their competence to stabilize the markets and inject liquidity into the economy. The level of funding is however not sufficiently ambitious and may not be enough to save the economies of some member states, which risks triggering a deeper crisis in the eurozone.

We cannot allow this crisis to create permanent damage to our economic ecosystem, which is why the MBB welcomes the European leaders’ call for an EU Recovery Fund, a framework which is being drafted by the European Commission; as well as the separate process of revising the EU Budget framework for 2021-2027 to rebalance the EU priorities to reflect the current crisis. Both are expected to be published later in May. The MBB also calls for a subsequent swift agreement by legislators to ensure that the much-needed funding is deployed immediately and without unnecessary delays.

On the revised EU Budget for the next 7 years, MBB President Simon De Cesare stated, “While financial instruments are important to leverage investment, what our companies require more urgently right now is direct injection of liquidity to ensure their survival. Specific sectors such as tourism need a strong stimulation as their economic activity will take much longer to recover, with lower occupancy expected for months, probably years ahead. It is clear that some countries such as ours, that rely heavily on the sectors most impacted by this crisis require more support than others and this should be reflected in a new and adjusted view on the soon to be revised EU Multiannual Financial Framework, which should consider the requirements of those worst hit by the pandemic.”

“The time it will take to get back to normal will depend on guidelines by public health authorities who will need to balance between the health of the economy and the health of its citizens. It is hoped that the assistance provided by National and EU governments will be sufficient to be able to weather the storm, however, newly restarted sectors will operate at diminished capacities due to social distancing requirements and this will only be mitigated completely when a vaccine becomes available and is successfully distributed to the population worldwide. Let us remember that Europe accounts for 51% of the global tourism market and contributes significantly to the economies of the Eurozone countries. It must be supported and sustained.” Mr De Cesare continued.

“The Maltese Government must push for a dedicated EU budget line for tourism that prioritises financial grants at least in the first years of exiting the crisis. This should focus on softening companies’ cash flow problems, particularly with operational activities linked to sustainability and digitalization, and will thus ensure the sector’s strong contribution to the recovery of the European economy while help meeting the EU’s overall sustainability objectives of the European Green Deal,” Mr De Cesare concluded.