Distinguished guests, dear colleagues, ladies and gentlemen,
It is a pleasure to be with you today, and I thank the Malta Business Bureau and the Malta Chamber for convening this important discussion.
When we speak about the Single Market Strategy, we often focus on legislative reforms, regulatory adjustments and enforcement. Those are essential. But today I want to focus on something equally important, and often overlooked, which is the role of European funding in enabling the single market to function in practice. The truth is that no strategy, no regulation and no freedom on paper can deliver meaningful results unless Member States have the structural capacity to participate. This capacity relies on the sustained support from EU funding, complemented by the ongoing commitment and investments made at the national level.
“The single market has been transformative for our country. It has allowed Maltese enterprises to export, to specialise, to invest, and to also attract talent.”
For Malta, this is not a theoretical point. It is the daily reality of how our economy engages with the rest of Europe. The single market has been transformative for our country. It has allowed Maltese enterprises to export, to specialise, to invest, and to also attract talent. It has opened opportunities that would never have existed for a small island at the periphery of Europe.
But these opportunities did not materialise on their own. They required the modernisation of infrastructure, the strengthening of institutions, the digitalisation of public administration, the development of skills, and the environmental upgrades that allow us to operate within EU standards. Through Cohesion Policy and related EU programmes, Malta has been able to seize the opportunities presented by the rapidly evolving single market, building on the determination and initiatives driven at the national level.
The single market is one of the largest integrated economies in the world, but its strength relies on the participation of all its territories, including regions, small states and peripheral territories. Here lies the central point. The single market does not operate in a vacuum. It is built on a foundation of cohesion. It works only when every Member State, regardless of size or geography, can participate on fair terms. This is why Cohesion Policy is not a side instrument.
It is the economic spine of the single market. It ensures that divergence does not become permanent, that transition costs do not become barriers, and that the freedoms of the single market do not transform into privileges for some and burdens for others.
Over the past two decades, Cohesion funding has enabled Malta to overcome structural constraints that the single market by itself does not resolve, strengthening the impact of our national strategies.
Higher regulatory standards and new Union requirements often increase operating costs for businesses and public authorities, particularly in smaller economies with limited scale. Cohesion policy does not eliminate these costs, but it makes them manageable. It enables necessary investments in infrastructure, systems and capacity that would otherwise be unaffordable or would place Maltese operators at a competitive disadvantage.
In this way, cohesion funds help ensure that participation in the single market is viable and that Malta can meet common objectives without compromising competitiveness or overburdening sectors with narrow margins.
But the link goes far deeper. Think about digitalisation. Modern compliance frameworks, cross-border services, e-commerce, cybersecurity standards and interoperability requirements all create new demands on Member States. Large countries have institutional depth and resources to absorb this complexity. Small ones must work twice as hard. EU investment in digital public administration and emerging technologies has been essential for Malta to maintain alignment with evolving EU standards.
Without these investments, our businesses would face a double challenge: complying with EU rules and compensating for domestic structural limitations. Cohesion funding removes this imbalance.
Regulatory change in the Union often reshapes how companies operate, from production processes and supply chains to compliance systems and investment decisions. For small businesses in Malta, these adjustments carry real costs, and for an island economy the structural constraints are even more pronounced. Cohesion funding helps absorb these pressures.
It supports the upgrades, capacity building and systems modernisation that firms and public authorities cannot finance at scale on their own. This prevents smaller economies from falling behind when common Union rules become more demanding, and it ensures that Maltese enterprises can remain competitive in a single market where the cost of compliance continues to rise.
Last Friday, I attended a Conference in Bucharest organised by my Romanian counterpart. I stressed this point in the presence of Commissioner Fitto and Commissioner Minzatu stressing the need to ensure that Cohesion Funds continue to offer the necessary financial support to address the challenges that are inherent to being an island.
“Cohesion Policy must help create the right environment so that competitive EU-wide funds become accessible rather than out of reach.”
This brings me to a broader reflection. As Europe prepares the next Multiannual Financial Framework, the debate is no longer only about numbers. It is about direction. The Union is shifting towards more competitive, EU-wide programmes. The new Competitiveness Fund is one example. Instruments like InvestEU and Horizon Europe are essential for Europe’s technological leadership.
But they favour Member States with strong research ecosystems, large industrial sectors and deep administrative capacity. If this trend becomes the dominant model, there is a risk that smaller Member States slowly lose ground.
This is why the future of Cohesion Policy is so important. Cohesion Policy is the counterweight that ensures the Union remains integrated and not fragmented. If Europe wants a single market that is competitive globally, then it needs a strong foundation of investment that keeps all Member States aligned and capable. Excellence and competitiveness cannot flourish on a fractured base. They require cohesion.
For the next MFF, Malta has three priorities that flow directly from our experience. First, we need Cohesion Policy to continue addressing structural realities. Geography cannot be ignored. Insularity cannot be ignored. Scale cannot be ignored. A one-size-fits-all model will not work. Cohesion must remain place-based, flexible and grounded in the unique challenges of each Member State.
For Malta, this means continued support for connectivity, environmental resilience, digital infrastructure and administrative capacity.
Second, we need Cohesion Policy to integrate competitiveness objectives in a way that is accessible to all Member States. This does not mean lowering ambition. It means recognising that innovation ecosystems differ in size and maturity.
Cohesion funds can strengthen the enablers that allow small states to participate in European value chains. Malta does not need massive research campuses to contribute to EU competitiveness. It needs targeted investment in research capacity, digital technologies, skills and specialised niches where we can excel. Cohesion Policy must help create the right environment so that competitive EU-wide funds become accessible rather than out of reach.
Third, we need the next MFF to support administrative capacity. This is not a technical footnote. It is the determining factor of whether Member States can absorb funds, implement projects and comply with increasingly complex rules. Administrative burden affects small states disproportionately. If administrative capacity is not supported, the gap between Member States grows. And that gap becomes a barrier within the single market.
The private sector understands this reality. When businesses face different regulatory performance, different levels of digitalisation, different environmental standards and different timelines for implementation, the single market becomes uneven. EU funding helps level the playing field. It strengthens institutions, speeds up processes, and reduces compliance costs. The private sector therefore has a direct interest in the future design of Cohesion Policy.
Let me also reflect briefly on the structural pressures facing Europe. Geopolitical instability, technological competition, demographic shifts and climate impacts are forcing Europe to rethink its economic strategy.
Strategic autonomy, resilience and competitiveness are becoming central to the debate. But strategic autonomy cannot be achieved if only some Member States have the structural foundations to deliver. The new MFF must therefore balance excellence with cohesion. It must avoid creating a two-speed Europe. It must invest not only in global competitiveness but also in the capacity of each Member State to contribute.
For Malta, the priority remains clear. We want an EU budget that strengthens the single market. We want Cohesion Policy that supports transformation. We want competitive instruments that remain accessible. And we want a funding framework that recognises that small Member States face structural challenges that require long-term support. This is not about special treatment. It is about ensuring that the single market functions as intended: as a level playing field.
The private sector has a crucial role as well. Businesses are not passive recipients of EU policy. They are active participants shaping how the single market evolves. The concerns raised by Maltese enterprises about regulatory fragmentation, barriers to services, delays in enforcement and compliance burdens are not abstract. They reflect the lived reality of operating within the single market. EU funding helps reduce these barriers.
It supports the modernisation of public administration. It strengthens regulatory capacity. And it enables governments to deliver reforms that benefit both citizens and businesses.
Let me end where I began. The single market has been one of the most powerful economic engines in Europe’s history. But its success cannot be taken for granted. It requires continuous investment, continuous reform and continuous commitment to fairness. EU funding is not separate from the single market. It is the mechanism that keeps it alive, cohesive and competitive. It ensures that geography does not become destiny. It enables transformation. And it gives every Member State the tools to contribute to Europe’s shared future.
Malta will continue working with its partners to ensure that the next MFF reflects these principles. We will advocate for a strong Cohesion Policy that supports transformation and competitiveness. We will continue investing in connectivity, digitalisation, sustainability and human capital.
And we will remain committed to ensuring that EU opportunities reach our businesses, our workers and our communities. The single market must remain a source of opportunity for all. EU funding is how we make that possible.
Thank you.
