National reform programme 2008-2010 Malta - European Commission

Whereas it may be confidently ascertained that there do not seem to be insurmountable
difficulties in the majority of the professions, such as engineers and pharmacists, some
difficulties may arise in the legal professions, that is, lawyers and notaries. These difficulties
will be better identified when a deeper analysis is conducted.
Prima facie, there seem to be no restrictions in place which potentially raise competition
concerns. Existing entry restrictions relate exclusively to educational and training
requirements, and as such are deemed to be directly related and proportionate to the ultimate
goal of ensuring the proper practice of the professions concerned in the general public
interest. In particular, it must be noted that there are no quantitative restrictions on entry into
any of the professions concerned.
Furthermore, the imposition of fixed or recommended tariffs by these professions have been
found to be present solely with regard to three of the six professions considered – namely
lawyers, notaries and architects. In each case, fixed tariffs arise exclusively from national
legislation – namely the Code of Organisation and Civil Procedure (Cap. 12). The remaining
professions, on the other hand, enjoy complete freedom with regard to pricing of their
services.
With respect to restrictions on advertising, the Codes of Conduct relating to the architectural,
engineering and legal professions respectively prohibit the soliciting of work and the offering
of professional services through commercial advertising media, whilst permitting certain other
forms of advertising insofar as they ensure the dissemination of objective information
regarding the services supplied by individual professionals or firms. In each case, such
advertising restrictions are aimed at avoiding the making of incorrect, misleading or
exaggerated statements by professionals which may potentially misinform the public with
regard to the provision of services involving a substantial ‘asymmetry of information’ as
between customers and service providers.
Reduce state aids and redirect them towards horizontal objectives, especially R&D
The level of State aid granted in Malta during 2006 amounted to €115 million, thus reflecting a
decline on the 2005 levels which stood at €146.6 million, and which represents 2.29% of GDP
in 2006 compared to 3.16% in 2005. However, it should be noted that although Malta has one
of the highest ratios of State aid to GDP, the share of the absolute amount of State aid
granted by Malta represents only 0.15% of all the State aid granted by the EU-25 in 2006.
Hence, the impact of possible distortion on competition in the total internal market is
somewhat limited.
The level and composition of State aid in Malta is also reflective of the need for specific
interventions in particular sectors also deemed to be necessary during EU accession
negotiations. These include the restructuring plan for Malta Shipyards and operating aid
granted under the Business Promotion Act (Cap. 356) earmarked to allow for the orderly
integration of the small Maltese economy into the European market. In the agriculture sector,
State aid under the Special Market Policy Programme for Maltese Agriculture (SMPPMA) is
being granted with a view to allow operators to adjust to the common market and protect
consumers against abrupt increases in prices.
Some State aid schemes consist of aid in the form of fiscal measures that are directly related
to the future profitability of enterprises (most of which deal internationally). Moreover, some
SMPPMA schemes are tied up to the international price of agriculture commodities (for
example, cereals and sugar), thus making future projections of aid in this area is very difficult..
On this basis it can be noted that the trend in share of aid to GDP has been moving along a
declining trend; down by some 0.72 percentage points for the period 2001-2006 in the case of
total State aid granted by Malta and down by 1.21 percentage points if no account is taken of
aid granted to the agriculture, fisheries and transport sectors. The reductions registered in the
same ratios for the EU-25 are 0.05 and 0.07 respectively.
Malta National Reform Programme 2008-2010 - 32 -