Manufacturing remains a vital engine for Europe’s economy, but without urgent reform to competition rules, funding structures, and sustainability mandates, small states like Malta risk being left behind. 

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That was the sentiment shared by panellists at an event hosted by the Malta Business Network and the Embassy of the Kingdom of the Netherlands in Malta, earlier this month, marking 60 years of diplomatic relations between the two countries.  

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The event brought together expert voices from across the manufacturing ecosystem, who agreed that Europe must move faster, cut red tape, and embrace digital and green innovation if it wants to remain globally competitive in manufacturing. 

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The evening opened with a keynote presentation by Arthur ten Wolde, Executive Director of Ecopreneur.eu and Head of Circular Future, who outlined Europe’s evolving policy landscape in sustainability and circularity. 

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“The Green Deal may be too bureaucratic in parts,” he admitted, “but let’s not throw the baby out with the bathwater. Ambitious implementation is essential for long-term resilience.”

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Addressing a question from the audience, “What can Malta do?”, ten Wolde pointed to the opportunity for small island states to lead in areas like reusable systems and closed-loop solutions, noting that scalable models may be more achievable in smaller geographies than in large nations.

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“Why not roll out a reusable cup system for the entire island? In a place like Malta this can be achieved.”

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Moderator George Gregory, CEO of Malta Enterprise, opened the panel by referencing the Draghi Report, authored by former Italian Prime Minister Mario Draghi, which calls for a rethink of EU competition policy to enable the scaling of firms in strategic industries. 

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“It’s been a wake-up call for Europe,” said Gregory. “There’s been movement, but not enough.”

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Nick Xuereb, CFO of Toly Group, spoke candidly about Malta’s challenges, highlighting the disparity in EU funding access between regions like Sicily and Malta. 

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“We’re in the same sea, facing the same pressures, but the rules aren’t equal,” he said. 

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Xuereb also noted the poaching of skilled employees by the government as an ongoing issue for manufacturers trying to build long-term talent pipelines.

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While manufacturing remains a “tough business,” Xuereb emphasised the strategic role of R&D and innovation: “Low-skilled jobs are growing rapidly, but we need to focus on value creation. Digitisation and smart manufacturing are where our competitive edge lies.”

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From a geopolitical perspective, Xuereb underlined how tariff volatility has created both headaches and unexpected opportunities, recounting how one U.S. client opted to fast-track production in Malta due to shifting trade rules. 

“One-third of our output goes to the U.S., so we feel these changes acutely,” he said.

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Stanley Muller, Commercial Director at AIVHY, stressed that Europe has the talent to lead a new industrial revolution, but that this requires coordinated efforts in digitisation, sustainability, and supply chain integration. 

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“The Fourth Industrial Revolution is happening now. Europe must connect its innovation strengths both vertically and horizontally across the sector.”

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Panellist Annabelle Diepenhorst, CEO of HSBC Netherlands, responded to audience concerns about the banking sector’s role in underinvestment: “Yes, banks have had their moments of criticism, but during COVID, they were part of the solution. HSBC has since launched an innovation bank to support precisely the kinds of transformations we’re talking about tonight.”

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Still, frustration over bureaucracy and policy fragmentation was a recurring theme. One audience member asked when the EU would finally stop adding “more red tape,” with the Corporate Sustainability Reporting Directive (CSRD) cited as an example.

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Ten Wolde and Xuereb both agreed that better implementation, not elimination, is the answer. 

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“Every country in Europe thinks it’s a special case,” noted ten Wolde. “But we need to start thinking as one market—especially when it comes to the circular economy.”

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Gregory raised a recent article from The Economist suggesting the world should move on from its “obsession with manufacturing.” He challenged the panel to defend the case for manufacturing in Europe, and in Malta specifically.

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“Manufacturing is not a vanity project,” Xuereb responded. “We’re not subsidised. We’re profitable because customers choose us. That’s the purest validation of value.” 

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Diepenhorst added, “In today’s world, self-sufficiency is no longer a luxury, it’s a necessity. Local supply chains are more sustainable and more secure.”

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Gregory concluded: “The world has changed. Having a manufacturing base is not just about growth—it’s a form of strategic defence.”

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The Malta Business Network brings together industry leaders, experts, and policymakers for monthly panel events, discussions, and networking.

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