Determined efforts must be made to streamline bureaucratic procedures, eliminate outdated regulations and generally reduce the cost of engaging in any economic activity. The Better Regulation Unit in the Office of the Prime Minister must meet the expectations its creation has raised. Failure to do so risks compromising all the efforts being undertaken at both the macro and microeconomic levels to create a modern, dynamic economy. At the national level, moreover, we need to understand that the simultaneous pursuit of economic growth and a high degree of social protection can only be achieved by making our product and labour markets more flexible; by investing more in people, refining their skills and helping them into work, while introducing an obligation to take up jobs; and by giving more importance to developing our scientific and technological base. We do not need to look far to see how this can be done. Faced with high labour costs in the late 1990s, German companies started restructuring and downsizing. The government meanwhile introduced social security reforms aimed at making the welfare state less expensive, as well as labour market reforms that created incentives for the jobless to work. An awareness developed that the solution to chronic deficits and unemployment could no longer be to cut public investments. As a result, Germany’s unit labour costs have fallen by 12 per cent since 1999 against those of France.
Michael C Bonello: Pursuing faster growth in a stable macroeconomic environment Speech by Mr Michael C Bonello, Governor of the Central Bank of Malta, at the Annual Dinner of the Institute of Financial Services, St. Julians, 10 November 2005. *  *  *  Prime Minister, Parliamentary Secretary, Excellencies, Ladies & Gentlemen, I should first of all like to thank the President and Council of the Institute of Financial Services for inviting me once again to their annual dinner. Over the past six years I have been able to observe with satisfaction how the Institute has successfully adapted itself to the steady expansion of Malta’s financial services industry, and to the demand this growth has generated for a diversified range of professional expertise. One planned innovation which I consider most appropriate is the Certificate in Mortgage Advice and Practice that is partly based on Maltese law. This annual occasion also affords me a welcome opportunity to share with a distinguished audience of bankers and their corporate guests the Bank’s thinking on a subject of topical interest. In today’s complex global environment several issues spontaneously present themselves as likely candidates for further analysis. For us in Malta, the major policy challenge at this time is to return the economy to a path of higher and sustained growth. The facts speak for themselves.