all the corners of the country – it was expensive to erect branches – now, with this new innovation, they do not have to – they only need to look out for the appropriate agent. • finally, we will continue to promote innovations while ensuring that there are adequate safeguards to foster financial sector safety and soundness. i am sure this workshop will expound on these important dimensions and provide the central bank with the richness of policy interpretation. it is now my distinct pleasure to declare this workshop officially open. thank you.

consolidation and eu membership are unlikely to exercise a marked impact on growth in the coming months. growth forecasts for 2006 vary between 1 % and 2 %. the current economic situation, therefore, requires decisive action designed to produce early results. i, therefore, feel obliged once again to make a strong appeal to all the social partners not to underestimate the threat which today ’ s realities represent for the wellbeing of their own members, and to cooperate in the search for real, long - term solutions in the national interest. the alternative is a slow, but depressing process of stagnation. the way forward towards faster growth lies in the first instance in striving to maintain the competitive advantage of traditional sectors – which typically rely heavily on cost advantage and where market share is being lost -, while promoting the development of new activities that exploit the potential offered by malta ’ s strategic assets. these include eu membership, a modern technological infrastructure and a skilled and flexible labour force. the current, encouraging expansion in new activities such as financial services, software development and pharmaceuticals attests to the competitive edge which our economy indeed enjoys in these areas. this advantage must, however, also be supported by a stable operating environment that is responsive to changing market conditions. elements of a coherent policy framework such an environment requires a coherent policy framework on three levels : the first is the macroeconomic level, where a sound financial system and prudent fiscal and monetary policies should combine to provide favourable conditions for the restructuring of the productive base. at the microeconomic level, resources must be more efficiently allocated and managed by enterprises so as to obtain the maximum possible degree of cost - effectiveness and market penetration. the third involves what may be termed as meso - level policies, involving specific sectors. policy at this level should primarily avoid distorting the mechanisms that facilitate economic activity. supportive macroeconomic policies are already in place … at the macroeconomic level, the recent track record has been largely positive. fiscal consolidation is progressing in line with the projections of the convergence programme. despite weak growth, the fiscal balance improved significantly in 2004 and again this year. this has not escaped the attention of international observers. the recent assessment of the maltese economy by the imf, for example, commends the progress achieved in strengthening macroeconomic management, including the substantial reduction in the fiscal deficit. looking ahead, i am pleased to note that the budget for 2006 bears the hallmark of continuity. operating within the constraints represented by the natural upward