Aug 2010:
Reproduced by kind permission of Ian Le Breton and the Gibraltar Magazine.
We cannot ignore the economic crisis across Europe and the wider world. Although I wish it were otherwise, it is the main issue affecting all our lives at present. And I re-iterated my opinion that whilst we cannot in any way be complacent here in Gibraltar, we do at least seem to be weathering the storm relatively well. Certainly we are not seeing the major cuts in public services and massive tax hikes being seen elsewhere in the EU.
It was with this exchange fresh in my mind that I set out for a long planned business trip to see my colleagues at Sovereign’s office in Malta. Although I have been there several times, this was to be my first trip since I moved to Gibraltar in 2004. Given the extensive, historic links between the two countries, I had been anticipating it with great interest. How is Malta coping with the global financial crisis and what similarities remain today between the island of St. Paul and the Knights of St. John and Gibraltar?
As a full member of the European Union, on 1 January 2008 Malta adopted the euro. As a schoolboy with a passion for useless information it always fascinated me that Malta was one of the few places in the world where a pound bought less than one Maltese lira – I could never work it out. Indeed, at the exchange rate fixed for Malta’s euro entry (€1 being the equivalent of just 0.4293 of a Maltese lira) meaning that had it still been around today, one Maltese lira would be worth no less than two pounds sterling. Many tourists were caught out in the old days when they saw signs in Malta reading £1 and discovering the real cost was much higher in sterling terms.
The first thing that strikes a visitor from Gibraltar is that any idea that the two places themselves are similar geographically speaking is simply stretching the bounds of credulity. Malta is a large island of over 300 square kilometres (in fact the Republic of Malta comprises Malta itself together with neighbouring Gozo and the diminutive but delightful Comino between the two main islands). Not only is Malta therefore many times larger than Gibraltar but the population of some 400,000 is thirteen times as large as ours.
But ignoring the physical differences for a moment, are the two countries similar economically? Moreover, how is Malta meeting the global economic challenges we are all living through at present?
Malta and Gibraltar share a rich heritage and the British connection is still evident in so many ways as one strolls through the compact and cobbled streets of Valletta, the capital, or when moving about the island. Almost everyone speaks English fluently and two thirds are equally able to converse in Italian. There is a local language, Malti, which uses many words derived from Arabic. The histories of both peoples coincide in many respects: control by various other countries throughout history culminating in British domination that in Malta’s case ended with independence in 1964. Interestingly ten years later Malta became a republic so although a member of the Commonwealth, the head of state is a Maltese President and not H.M. The Queen. As in Gibraltar’s case, Malta proved to be of vital importance to the allied war effort during the Second World War, and the whole island was awarded the George Cross in 1942 to mark the bravery of her people in the face of horrendous and constant bombing attacks.
Of course as any Gibraltarian well knows, the links with Malta are much deeper than mere comparisons of the two countries’ geography and similar history. Many Gibraltarians can trace Maltese roots in their family history. Walking through the streets of Valletta one could be forgiven for thinking they had arrived in Gibraltar’s Main Street by reading the family names that adorn today’s shops and offices.
So how is Malta faring in these days of economic uncertainty? There are many similarities between the two countries, despite their significant difference in size and population. Therefore, it is not altogether surprising that, again without being at all complacent, Malta is more than holding her own and is living through the crisis in better shape that most of her EU counterparts. Malta is by far the smallest EU member state in terms of size. Luxembourg is approximately nine times larger by area although the population at 500,000 is just 25% higher. Malta is protected from many of the social issues including large-scale unemployment and at 4% her GDP deficit is one of the lowest in the EU according to Eurostat in May this year.
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