Like many others, I am the by-product of the European project.
The European Union funded my education in Southeast Asia almost 20 years ago, when the Asia-Europe Institute of Kuala Lumpur blended European and Asian students to educate them about regional integration. When ASEAN graduates would become professionals – they believed – they would fall in love and replicate our model in their own countries. How naive we were.
In retrospect, my chief learning was to understand that the European paradigm, as we knew it, would end miserably declining. For them, Brussels was the ultimate wibbly-wobbly, timey-wimey paradox of bureaucracy and ineffectual policies.
The EU has long been one big unstructured mess and it is to be seen if it will survive a pandemic. I wasn’t completely stunned when the Brits decided to bail themselves out and leave us with our toy. I am far from being a Eurosceptic but the only reason why we have bound ourselves together for so long is that Germany, sometimes France, poured an immense amount of cash in the project. Because somehow, as Robert Cooper wrote in his now-famous writing on the ‘Post modern state and the world order’, we agreed to control each other’s weapons.
Cut to 2020 and COVID-19 Europe. For the first time in, well, ever, the European construct might be short on cash. It cannot be any other way. Major nations are going to deal with the economic consequences of the crisis (I am a Spaniard, so say no more). The amounts of money that will have to be poured in to start reconstructing our economy – there is no Marshall Plan this time and Donald Trump has not been Truman or Eisenhower – have to be massive and there is not enough for everybody.
My take is that, as the future needs of the large countries of the European Union grow, the small ones will be left with nothing. The financial needs of the southern European countries will increase so much that there might not be sufficient resources left for the smallest states, read: Malta.
The last quarter of 2020 will be dramatic for the countries on the southern edge of Europe. Spain’s GDP is expected to fall below 10 per cent while Portugal is expected to fall by 8.60 per cent, Italy more than seven per cent and Greece by over five per cent. Do not re-read the numbers; they are impossible to believe.
The first quarter of 2021 looks even more serious. For obvious reasons, if it wants to survive – I would not bet on it in the long-term – the union cannot let the big countries, its pillars, fall. If Italy or France were to fall, the whole European construct would disintegrate. But I reckon some in Brussels believe that they can let Cyprus fall, or Malta, for that matter, because their sinking does not threaten the advancement of the union.
Malta needs a complementary arrangement for when the European system is unable to lift everyone- Ramón Pedrosa-López
Malta has no choice but to become single-minded. For that, it only has two options: its internationalisation and its digitalisation. Becoming a champion of the digital economy, the new trends of circulation of capital and ideas, the investment in tech, start-ups and innovation, will strengthen our position as the only relevant English-speaking country in the EU.
Recently, a survey stated that a large percentage of Maltese see immigration as a critical problem for the country. Opposite Malta is Libya, a country that can have the most significant effect on migration-related tension with Europe. With the Libyan coastguard depending now on Brussels’ treasure trove and those funds quickly drying up, the country has to raise its self-sufficiency levels as fast as possible.
What will happen if, as a result of the unprecedented crisis that is coming, the European Union reduces its funding of that specific project? What will happen if the union is not able to protect the southern coast? Immigration, more than a problem, would become a catastrophe.
The combination of public health, economic and political crisis unleashed by COVID-19 will provoke a dramatic increase in the level of conflict in the Mediterranean basin. This trend will have severe effects on transport-related businesses such as airlines, tourism, airport infrastructure or services.
We have to bet on the digital economy, on the tech-based economy to safeguard our position.
Next year, mobility is expected to increase but liquidity will be severely affected, so we have to brace for it and make amends – now.
Within the European Union, governments of larger allies such as France or Italy will have to focus their efforts on economic reinvigoration, dramatically reducing their capability to project security and stability towards the Mediterranean. The sole support of Europe will probably not be enough. All these factors will create a new security and commercial environment, which will demand a radical adaptation of the economy of companies to guarantee its survival and profitability.
Malta, a historically sophisticated financial country, needs a complementary arrangement for when the European system is unable to lift everyone. What it needs the most is to become a truly digital and international hotspot, attracting 21st century digital professionals who will be able to move in next year and build a high power tech-led ecosystem that would allow the country to make the most of its tradition as an open-for-business country.
Ramón Pedrosa-López is president, the Paloma Project and also a financial and defence strategic communications specialist based in Valletta.