European Commission recommendations focus on education, pensions

The European Union's country-specific recommendations for Malta emphasize the need for a greater focus on the education sector, pensions system, public finances and access to finance. 

The recommendations, which were adopted on 14 July, will be valid for 12 to 18 months and social dialogue minister Helena Dalli described the measures as "an indication of what could realistically be achieved." 

At a meeting with the Malta Council for Economic and Social Development, a representative explained that this year there is more streamlining in the processes in the recommendations, with some aspects falling under specific groups, such as energy and the environment. Longer term policy would not be included in the CSR and focus would remain on the 12-18 month window.

Malta had the second highest rate of early school leavers in the EU - secondary education students aged between 18 and 24, who are not in training - and its target for 2020 was at 10%.

Malta is also among those with most progress, with an annual 3.5% annual drop in early school leavers between 2013 and 2015.

Literacy tests had revealed that Malta was among the lowest ranking countries in this aspect, which resulted in a recommendation for education. Dalli pointed out that the government had strived to reduce early school leaving rates with working groups and early school leavers policies, but that more efforts were needed and results took time.

With regards to pensions, the recommendation was to effectively increase the age of retirement quickly to increase sustainability of public finances, a recommendation that has been made in past years as well. The new retirement age, the recommendation suggests, should reflect new life expectancy rates.

The increase in expenditure on age issues from 2013 to 2040 is expected to centre mostly on the health sector. It was explained that age issues included health care, permanent care and pensions among others.

Discussing public finances and access to funds, the representative said that out country still lagged behind other EU member states in terms of investment. Access to credit was reportedly one of the most frequently cited reasons for not investing in Malta in a World Economic Forum study.

MHRA chairman Tony Zahra spoke out about the need to provide better solutions rather than point out the problems, to which representatives said that a greater focus on equity financing was needed. They added that the commission's job was not to offer solution, but to safeguard a country’s right to its own solutions and point out and emphasize the main issues.

The EU has also seen a general reduction in national deficits, with the average being lower than 3% for the first time since 2008. The rate is also dropping and it is expected to fall to something like 1.7% in the coming years, another representative explained.

He said that this drop also matched Malta, where deficit had dropped to 2.1% in 2014 from 2.6% in 2013. He added that public debt was however still over 60%, so the country needed to drop debt significantly in the next three years.

The recommendation points out that following the emergence from the excessive deficit procedure, Malta is expected to get closer to medium term budgetary objectives of 2015 and 2016.

The objectives, all decided by Malta, pointed at reaching a good balance by 2019.