Former Prime Minister Alfred Sant claimed that Malta needed to team up with other like minded EU member states to resist any changes in the treatment of financial transactions that would hamper the financial services sector in the Maltese economy.

Luxembourg, Cyprus, Austria and the UK  could be potential allies in this effort. In the circumstances, given that financial services account for over 15 percent of gross domestic product,  Malta needed to concentrate on defending its flexibility in promoting and developing services for which there was a demand. Like other islands, her institutional flexibility was an asset that could not be given up lightly.

The EP candidate, who  was speaking at a seminar organized by Finance Malta, stated that political sentiment against countries providing financial services has been growing strongly in recent months. This has been the case especially in Germany and France, and in Spain too if to a lesser extent, including respected politicians of both right and left. The sentiment is expected to grow as new controls are implemented from Brussels on government budgeting within the eurozone and the rest of the EU.

Governments will be hardpressed to balance their books and will seek to increase their effective income by preventing losses due to tax leakages. The campaign has been taking the form of calling “tax havens” all countries which provide professional services, including Malta. It  will be further emphasized when and as new EU wide taxes are launched, as with the financial transactions tax that will apply to eleven countries which have chosen to adopt it.