The Russian invasion of Ukraine has so far cost Malta €200 million, Finance Minister Clyde Caruana said on Thursday, as he stressed that the impact of the war is "massive".

Government subsidies and a cushion to make up for inflation are behind the cost. 

Speaking during a debate by the Malta Chamber of Commerce, Caruana explained that the €200 million is the cost borne for this year as a result of what happened this week, mainly due to fluctuations in the energy markets and the cost of oil which skyrocketed.

He said the added cost covers bills for gas and fuels until the end of the year and was expected to continue increasing. 

"All people are talking about is the Ukraine war. I am more worried about the war than I was worried about COVID, economically. This is not just a war with bombs, but it is an economic war and its impact will not be small.

"We have to do whatever it takes to save our economy. I am aware of the massive hit caused by the war. €200 million were allocated in the Budget because of COVID. In one week of war, we are estimating that this will cost us €200 million," Caruana said.

This amount might also have to increase in the future, he said. 

The minister noted that increases are happening "in a way that has never happened before" before saying he was not making the remarks to "scare people" but because the situation is a "serious" one. 

Photo: Malta Chamber

Caruana insisted the government will be "cushioning the blow" and assured that utility bills and fuel prices will "remain unchanged throughout this year". 

Reacting as part of the debate, PN election candidate Graham Bencini said this was not the first time the government needed to deal with such issues. 

"The PN was in government when there was the 2008 recession. We had done everything to save the economy. I think we are on the same page because we are in politics to save jobs.

"The system is volatile. You cannot have proposals only to change them. Before COVID, business people had to change their projections, that’s how you do things. You adapt to the changes," Bencini said.

To this, Caruana said he will continue to insist the burden of the war is not placed on the people and business, otherwise this would be like giving the economy "an engine brake".