Yesterday marked the 10th anniversary of Malta’s membership of the European Union. The contents of the debate on whether we should join the EU or not seem a thing of the past.
With the knowledge of hindsight, I believe there is general agreement that EU membership has proved to be of benefit to Malta’s economy. What people seem to argue about is whether on some specific issue or other, we could have obtained better conditions. This point is also evident in the run-up to the elections for the European Parliament due later this month.
Three elements of data say it all. The rate of unemployment stands at 6.4 per cent when compared to 7.4 per cent a decade ago. The number of persons in employment increased from 146,000 to 178,000, an increase of 22 per cent. The nominal gross domestic product increased from €4 billion 10 years ago to €7.2 billion, an increase of 80 per cent. These figures show that our economy has made great strides since 2004; one may even say as was expected. One should also not ignore the odd €2 billion that Malta has received in the past years or will be receiving in the coming years from the EU.
The so-called costs of non-Europe would have been too large for our economy to sustain them
However, the good news does not stop here. We have been able to adopt an acquis which at times may have seemed overwhelming. So we have adopted health and safety legislation, consumer protection legislation, environment legislation, etc, which may have represented a cost to businesses operating in Malta. However, it did not force down their closure. We are now operating in a European legislative environment which has enhanced our way of doing business.
Another milestone in this 10-year journey has been the adoption of the euro as our national currency. Within a framework of free movement of capital, goods and persons, we ran the risk of a flight away from the Maltese lira, unless we adopted the euro. We went through the currency changeover without experiencing the inflation experienced by other countries when they went through their currency changeover experience. As a result of the euro, we are also benefitting from a lower interest rate than would have been possible had we maintained the Maltese lira.
As a country, we have been able to attract new investment, and therefore new job opportunities, in sectors that were hitherto untapped. We have not lost our manufacturing sector as some had predicted. If anything, it has been strengthened and the resilience it showed at the time of international economic recession is proof of that. Admittedly, some manufacturing companies have shut down. However, this has happened not because they could not compete in the international markets but because they could not compete locally.
Competition has increased and monopolies have been gradually dismantled. The effect of this is that consumers are getting a far better deal as they have access to better quality products and are enjoying a higher level of protection than they used to. The wide choice of products has also helped to contain price increases across most product sectors. The difficulty in maintaining living standards does not arise from high prices but from the fact that a number of products have become necessities.
The financial services sector continued to thrive as the country explored and developed new niches. We could also benefit from the fact that our legislation had the blessing of the EU. So we are seen as a tax-efficient country but not as a tax haven. Again, the resilience of the Maltese banking sector and the strength of the regulatory framework were very evident at the time when the international financial crisis hit in 2008.
Our ability to play by the rules and not to sidestep them as other countries have done, has proved to be very beneficial to our economy. Although we are still striving to achieve a balanced budget, there is no doubt that EU rules have given us the discipline we required to rein in the fiscal deficit to a sustainable level. The sovereign debt crisis did not have an impact on us and in this regard we are seen as a virtuous country.
One might ask whether I see any negative impact anywhere as a result of EU membership. There must have been some negative consequences but, in the larger scheme of things, they lose their significance as the data itself shows.
I have never been shy of proclaiming my pro-European sentiments. I strongly believe that when we joined the EU, our economy made a quantum leap. This was achieved because as a country we understood and exploited the economic opportunities of EU membership. If we had not joined the EU, we would not have remained stationary or just made small progress. Our economy would have regressed.
The so-called costs of non-Europe would have been too large for our economy to sustain them. This is why I believe that this 10th anniversary of our EU membership is a time for celebration. And the Maltese public knows this as research continually shows that more that 65 per cent of the adult population claim that EU membership has been of benefit to our country.