Issue link: https://maltatoday.uberflip.com/i/229731
12 BUSINESS & FINANCE maltatoday, WEDNESDAY, 18 DECEMBER 2013 Mediterranean Macro-Regional Strategy could restart economic growth in the South During its December plenary, the European Economic and Social Committee (EESC) has approved a report that calls on the Commission to draw up a Macro-Regional Strategy for the Mediterranean. The aim of the proposed strategy is to support the regions facing financial and social challenges that cannot be effectively addressed by the regions or indeed countries on their own. The report follows on the footsteps of the Danube strategy and the Baltic Strategy, which have recently been drawn up by the EU and are currently being implemented. The EESC report was drawn up by Maltese EESC member Stefano Mallia together with Italian member Stefano Palmieri. The report, which is the result of months of meetings and a public hearing in Italy, calls on the Commission to develop a more integrated policy for the Mediterranean regions which must then be supported by a strong action plan that clearly identifies projects that will have a clear and concrete impact on the daily lives of the citizens of the region and that will help address the causes of the current uncertainty that is prevalent in the region. The report specifically calls for Malta and Cyprus (as the two island states) to take a specific role in the development of the strategy. While presenting the report to the EESC plenary, Stefano Mallia said that "for too long the Mediterranean has suffered from an on-off approach. This has led to a failure of the EU's policy in the Mediterranean region in spite of the fact that we continue to spend millions of euros every year. These initiatives have had some success, but they have not fully addressed the political, economic and social development goals initially set forth. What we are proposing with this strategy is that we get better value for the money being spent and that we start to register real socio-economic Stefano Mallia progress in the region. There is an urgent need for a strategy of this kind but it has to be concrete and of substance". According to the Mallia – Palmieri report, the Mediterranean Macro Regional Strategy should be based on the following three pillars of growth: smart growth (with a particular emphasis on Blue growth), actively encouraging a knowledge-based economy supporting "innovation" and new technologies; sustainable growth, promoting a sustainable, greener and more competitive economy; and finally inclusive growth, promoting an economy which places strong emphasis on job creation and poverty reduction. Moreover, a method must be introduced for measuring policy effectiveness, so that corrective action can be taken whenever necessary and in a timely manner, also to avoid duplication through multi-level cooperation and coordination. At the same time, reducing the bureaucratic burden of reporting and form-filling placed on NGOs, SMEs and regional authorities, particularly those in the smaller regions, which are often discouraged from participating by their lack of capacity and the discouraging task of going through and keeping up with all the bureaucratic procedures, is likewise important. Also commenting on the report Italian Co-rapporteur said that "the coastal areas of the EU in the southern Mediterranean have the capacity to become innovative centres of dynamic economic and social growth by utilising their unique characteristics". Stefano Mallia concluded by saying 'the fact that the next two Presidencies of the EU are Mediterranean countries (Greece and Italy) provides us with a unique opportunity to start working in earnest on the proposed strategy. This proposal also has the support of the European Parliament and the Committee of Regions. "There should therefore be no reason for the Commission to delay the exercise. From our end, the EESC will over the coming months continue to push the Commission and the Council to set the wheels in motion. Our goal should be to have a strategy in place by the end of 2014." Fears of new recession in France The eurozone's recovery is continuing, a survey of businesses has suggested, but it has also revealed a widening divergence in economic performance between France and Germany. The latest purchasing managers' index (PMI) from Markit rose to 52.1 in December from 51.7 last month. A figure above 50 indicates expansion. The eurozone as a whole has started to grow again after a long recession. These monthly surveys of business managers give an early indication of countries' economic performance. Germany's PMI reading of 55.2 underlines the country's central role in driving the improvement across the region. The country's manufacturing industry continued to gain new orders after a rather weak start to the year. The services sector also continued to expand. France was a very different story, with its PMI reading falling to a seven-month low of 47.0. The figure suggests an accelerating contraction, and points to a decline in economic activity for the current three-month period. If that is confirmed by data for gross domestic product, GDP, that would be the second consecutive quarter of falling production of goods and services in France. In other words, a recession as the term is often used. It would be the second in rapid succession. The economy of France contracted in the final quarter of last year and the first three months of 2013. It grew for just one quarter before going back into decline. If this really is another recession that France is in now, it would make it what some call a triple dip. The first phase was the recession at the height of the global financial crisis. In the case of France, that lasted a full year, with growth only returning in the third quarter of 2009. GDP is still about 0.3% lower than it was in the beginning of 2008, just before that first recession. Germany, by contrast, is now 2.6% ahead. The most obvious and damaging manifestation of this weakness in France is unemployment. Just under 11% of those who want to work can't find a job. It's not the worst in the eurozone, but is much higher than Germany.