Sunday, 6 June 2010

Malta: A Warning From The Present

So, last Saturday we were on a trip to see Valetta at night (left), and then on to a secret location (the village of Marsa as it turns out - see below), where there would be a village fiesta and fireworks in honour of the local patron saint.  As things turned out the fiesta was great, as was the fireworks.  Marsa showed that it had more community spirit than the West of Scotland collectively.

As we were heading towards the next pick up, we started talking to our coach driver, about how the Euro had affected Malta since our last visit.  Our first visit to Malta was in October 2007, three months before Malta adopted the Euro.  Then prices were high, but that was down to poor exchange rates between Sterling and the Malteese Pound.  Last week, the near parity of the Euro to Sterling exposed how much dearer prices have become.  This at a time when the world economy is still, despite the protests of economy ministers, the G20, the banks, on the precipice.

Our driver told us that Malta was sold on the Euro on the principle that Malta would be a better off country, in an economic sense, if they joined the European Union.  I don’t know what the no campaign was like, it must have been a vigorous campaign.  The margin of victory was 7.3% for the yes campaign.  What we now see with Malta is what we have seen with other countries, a loss of sovereignty and power with Brussels insisting on the final say over many countries individual budgets.  Ireland were given a warning 3 years ago by Brussels when they proposed cutting taxes, one wonders whether they had any choice over the savage cuts which many right wingers here were urging our (former) government to implement here.  Interestingly the new Chancellor has insisted that the EU would not get a preview of the “emergency budget”.

The other problem facing Malta, alongside Greece, Portugal and Spain is the gradual drying up of tourists.  As it becomes more and more expensive to go abroad on holiday, more and more people will decide not to go abroad on holiday, perhaps deciding to holiday here.  If we assume that each plane holds about 200 people each, and that they each have 300 Euros spending money, then each plane contains 60,000 Euros injection into the local economy.  It is this drying up of the liquid economy which is the roadblock to recovery for many countries, this one included.

The interesting thing to emerge from the conversation though was the realisation that Euro scepticism is not some sort of British disease, but that there is a growing awakening of the waste and mismanagement going on in Brussels. A couple of days earlier, The Times of Malta newspaper carried reports that MEP’s voted to increase their staff expenses allowance to a total of 9.4 million Euro’s.  For some, the words “we are all in this together” are just words.  Is it any wonder no one bothers to vote for an MEP.

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