Economic prosperity in the EU depends on growth from within, but also on external factors such as geo-political stability. This is particularly important for member states on the periphery of the continent, who on the one hand are part of the EU single market, but on the other hand, whose economy is also substantially integrated with neighbouring countries outside the bloc.

This year marks the 25th anniversary since the Barcelona Declaration, which brought together EU member states and the southern Mediterranean partners, with the aim of turning the region into an area of stability and prosperity through dialogue and cooperation. This partnership was strengthened in 2008 through a more permanent setup in the form of the Union for the Mediterranean as an operational institution.

Significant events have happened since then, such as the Arab Spring, which had mixed outcomes. The Middle East peace process is not much better today than it was then. More recently, the EU faced an unprecedented migration crisis.

In this light, in February, the European Commission published a renewed partnership strategy for the southern neighbourhood, with a five-point plan that covers important factors such as human development and good governance; build prosperity and support the digital transition; peace and security; migration and mobility; and the green transition.

A comprehensive plan ‒ whereby through access to EU programmes such as Erasmus+ and Horizon Europe, developing international financial instruments through the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) to support the business environment, and technical assistance for effective policy making ‒ can go a long way to create the right conditions for the region to flourish and in turn also help the EU meet some of its own priorities and commitments.

The southern neighbourhood is also of strategic importance to Europe in our global leadership fight against climate change

This EU strategy is certainly encouraging news for Malta and Maltese business, as we lie at the heart of this sensitive geo-political region and are thus affected by all phenomenon or activities happening here, be it related to migration, trade, energy and tourism.

Malta is on the front line of the EU’s borders and periodically subject to migratory pressures. Therefore, we stand to benefit by technical assistance measures to southern countries to improve governance and border management. More importantly, from a human element, it would be positive if lives are saved due to this cooperation and ideally many more are prevented from ever being put at risk. At the same time, we must tap into the region’s talent pool as we return to pre-crisis economic levels.

Traditionally, Malta has had a strong trading relationship and business links in southern countries; however, much of the economic activity may have been lost due to the instability in countries such as war-torn Libya. But business relationships and links run deep and there is no doubt that once the political and economic conditions permit, Maltese businesses will be ready to thrive once again in Libya and throughout the region.

The process by which the EU’s trade policy looks to unlock trade and investment, by reviewing the existing network of association agreement as well as intensifying negotiations for the Deep Comprehensive Free Trade Area (DCFTA) with Morocco and Tunisia, are welcome developments. This will be further aided through synergies with sub-Saharan Africa, in the context of the African Continental Free Trade Area (AfCFTA).

The southern neighbourhood is also of strategic importance to Europe in our global leadership fight against climate change. The region is one of the most environmentally vulnerable; however, it retains some of the biggest opportunities to produce renewable energy.

In the long term, Malta stands to benefit substantially if the EU focuses public and private investment through sustainable finance in the southern neighbourhood. It should in turn develop the region into a renewable energy hub, for local consumption and to export clean energy to Europe, which in turn we would get access to through a more developed and integrated single European energy grid.

Southern neighbourhood countries still rely heavily on agricultural production, and if through EU technical assistance these countries develop and implement more sustainable food systems in line with the EU’s Farm to Fork Strategy, it would safeguard natural resources and in turn export healthier produce to the European and Maltese markets.

One final reflection is on the potential of tourism for the economic development in the southern region, which can also serve as a catalyst for peace. Tourism is a key economic activity for both sides of the Mediterranean shores and offers a contrasting, rich cultural experience for visitors from across the globe. The Mediterranean Tourism Foundation, a Malta-led initiative, is one entity working towards this goal, and the numerous stakeholders it brought together in the last years confirm that this is more than a concept.

I augur that the spirit of the Barcelona Declaration lives on, and the EU’s renewed stra­tegy for the southern neighbourhood lives up to the expectations, to reap the potential it truly has and of which Malta stands to benefit.

Simon De Cesare, President, Malta Business Bureau

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