January 31 has come and gone, and although I personally had hoped for a different outcome after last December’s general election, it is a well-known fact that the UK is now formally out of the European Union. As the leader of the highly respected international magazine –The Economist – puts it, the UK is now sailing “into the unknown”.
As I argued in a previous contribution of mine, there is no way of ascertaining the cost of exiting from the EU just as much as it is not possible to ascertain the cost of not joining in the first place.
An 11-month transition process is now under way – a process wherein the thorniest issues of trade and migration will be negotiated upon. In terms of trade, statistically, half of what the UK exports goes to the EU and in terms of migration, roughly three million EU citizens live and work in the UK.
The current prime minister, Boris Johnson, who projects himself as the reincarnation of Winston Churchill, is banking on the close ties the UK enjoys with the US to improve its current export market.
Although London and New York are still the major financial centres around the globe, he is probably banking more on the current buoyant economy the US is enjoying. That said, there has already been friction between the US and the UK around Huawei’s current bid to install 5G mobile technology in the UK.
It is still statistically evident that Malta somewhat depends on the British market
Although the UK will no longer be part of the EU’s institutional structures, the UK will surely leave behind the accounting concept of ‘true and fair’ within the EU’s legal framework. In the process of gearing itself up for membership of the EU, Malta practically modelled all its financial legislation on that in the UK.
It is also noteworthy to point out that we also imported the British model of accounting given that Britain was the last foreign ruler for nearly 180 years. Whether or not this was beneficial is another matter, which merits plenty more space in which to discuss it than that allocated to this article. Undoubtedly, the UK has always been a close ally of Malta within the EU institutions, especially where tax issues are concerned. Without the UK, an EU-wide system of tax harmonisation is more likely to happen. If that materialises, our economy will suffer in terms of being unable to offer tax advantages to attract more foreign direct investment.
Unless Johnson can manage more favourable trade deals after the conclusion of the current transitionary period, it is highly probable that the UK economy will shrink over the next three years. A direct consequence of that is less British nationals being able to afford a holiday here.
Notwithstanding that successive governments have invested heavily to diversify our inbound tourism, it is still statistically evident that Malta somewhat depends on the British market. Further diversification attempts would surely be beneficial for the local economy. Still, there could be fresh opportunities for Malta post Brexit. Within the bloc, it is now just in Ireland and Malta that English is spoken fluently.
Depending on the outcome of the transition process, it is highly likely that current players within the UK economy will try to establish themselves in some other EU state.
Malta could be a place to move to.
However, the current educational system needs to drastically improve our younger generation’s command of the English language.
We need an urgent but coherent approach to improve the English language skills of our younger generation.
While recognising the current attempts to improve the English language skills of those reading for university degrees, we need to address the issue more than ever before.