Further support for Maltese businesses in next EU budget

For businesses and entrepreneurs benefitting from EU support, the next funding framework will offer less red tape, with simpler ways to claim payments using simplified cost options, BusinessToday has learnt.

To facilitate synergies, a single rulebook now covers seven EU funds implemented in partnership with Member States.

The European Commission has also proposed lighter controls for programmes with good track record, with an increased reliance on national systems and the extension of the “single audit” principle, to avoid duplication of checks.

Looking into future funding opportunities, and in line with the consultation process on the National Reform Programme which is underway, Government intends to ensure that the next round of funding will continue to address the developmental priorities of the country -- including SME assistance – EU funds parliamentary secretary Aaron Farrugia told this paper.

Specifically, one of the Government’s investment strategy focus areas will focus on supporting SMEs in line with the Smarter Europe strategy – that is through innovation-led models, digitisation, economic transformation and internationalisation.

There has been significant EU investment in business in the previous period. Last month, a press conference was held on the Ta’ Qali Crafts Village project, which is nearing its completion date set for next year, and for which around €13 million in EU funds was invested.
“It is a privilege to put the EU funding teams at the disposal of entities such as the Malta Industrial Parks to see such important project finally come into fruition,” Farrugia said.

“This project is a tangible and visible one, in that it represents a direct investment in our infrastructure. And Malta has experienced and will continue to benefit from similar projects, as the island is provided with a much-needed infrastructural uplift.”

Specifically, key infrastructure projects that have been completed last year or are being currently implemented include the Kappara Junction, the Marsa Junction Super Structures, the Marsa-Ħamrun Bypass, significant investments in water, the regeneration of Lower Valletta, the recently opened National-Community Art Museum (MUZA) and the extension of the Xewkija Industrial Park in Gozo.

“However, we need to look beyond the ‘tangible’ and visible aspect of such projects, and consider the more indirect benefits they bring about. This is where the crafts village really shines – though the first thing that hits you when you visit the Ta’ Qali site is its contemporary design and visual upgrade, its key benefits will actually be found inside the new workshops once they become operational. In fact, the benefits of such a project are mainly addressed at the SME operators that will be positively impacted by the new environment in that they are now equipped with better tools to contribute more to the local economy,” the junior minister explained.

Additionally, apart from the business-related infrastructural projects, current funding and absorption rates indicate that Malta has already benefited strongly from EU funding directly targeting business and SME development. These include grants administered by the local managing authorities and entities such as Malta Enterprise (which also offers other SME consultancy services), covering areas such as setting-up expenses for start-ups, research and development, innovation and digitalisation support such as e-commerce, and expansion (growth, diversification, internationalisation).

Apart from grants, they also cover other financial instruments such as loan-guarantee products provided by commercial banks, which have an EU backing in terms of first loss guarantees. Government has also set up the Malta National Development Bank, which includes SME assistance as one of its possible remits, and looked into effective succession planning through the Family Business Act and incentives.

Taking further pointers from current funding, there are a number of local success stories which indicate that the local entrepreneurial spirit is very resilient and eager to innovate – as a result, local businesses look up to EU funds as a way of investing further in their competitiveness. Innovation for our local SMES ranges from new knowledge to new marketing practices, as well as management approaches.

“In Malta, we are aware of our inherent challenges, and the need to adapt our business models to the challenges of the global economy and be better equipped to develop new products and services. Government has listened to this SME need and created the supply of funds, and local firms has responded with an impressive take-up and effective utilisation. And this momentum needs to be maintained,” Farrugia said.

“Government policy - and hence EU funding as a policy instrument - will continue to keep SMEs as a key target audience. Government policy needs to continue to create an environment in which entrepreneurs and family businesses can thrive and entrepreneurship is rewarded, and listen to SMEs before introducing new laws, examining the effect legislation will have on small businesses,” he continued.

Farrugia explained that the Government will continue to help companies in need of support, make public administrations responsive to SMEs’ needs, adapt public policy tools to SME needs, and facilitating SMEs’ access to finance.

“Our aim is also to help SMEs to benefit more from external opportunities, such as the EU market and other emerging markets, and to promote the upgrading of skills in SMEs and all forms of innovation. This is a promise we feel we are delivering on, and will continue to do so.”