The past 20 years have shown that the people’s decision for Malta to join the European Union in 2004 brought substantial benefits, former Prime Minister Lawrence Gonzi has said.

On Wednesday, Malta will mark 20 years of European Union membership, having officially joined on 1 May 2004.

Gonzi, who held the position of prime minister in 2004, answered questions from The Malta Independent on Sunday regarding Malta's tenure in the EU and his views on the future. He was deputy leader of the Nationalist Party in 2003 when it had pushed for Malta to vote yes in the 2003 referendum to join the EU.

 

Looking back, how key has the EU been to Malta's development over the past 20 years?

These past 20 years have shown that the Maltese people’s decision to join the European Union in 2004 has brought substantial benefits to the country both as a nation and as a community of citizens. Those who opposed it are now supporters of membership. This is a welcome development in itself and it explains why surveys and polls have consistently shown that the majority of Maltese people are indeed positive about membership.

The economic benefits reaped from membership speak for themselves. Our entrepreneurs managed to tap into the single market which meant access to a much larger customer base without having to work around tariffs, extra costs and excessive bureaucracy. It has allowed our exporters and our service providers to engage in cross-border trade in a seamless way. And, I must say, it has proven, once again, that Maltese can compete both as regards professional competence, quality of service and cost.

Membership has allowed us to shift into a high gear economic model that successfully competes with other similar jurisdictions. Once dependent on low-skilled manufacturing and tourism, we are now an island nation that is focused on high value added services, including finance, information technology and maritime expertise. We have shifted from debt burdened and uncompetitive ship-building and ship repair to specialised aircraft maintenance and related services, pharmaceuticals, and so on.

We managed to achieve all of this because we invested our own funds – together with those provided by the EU – into education, especially in our University and MCAST, both of which produced the required human resources to sustain these new industries.

The introduction of the euro on 1 January 2008 was a major enabler in all of this. It placed us in the centre of European financial and commercial activity, reduced costs, increased our competitiveness and facilitated travelling abroad whether for business or pleasure.

Of course we benefitted from relatively large EU funds to move out of our Objective One status into a category that brings us closer to the general EU average of more advanced member states. But our membership was not only about money. It was about using those funds for long-term investments that allow us to reap benefits for years to come. Our investments in energy transition (vide the interconnector with Sicily), in our rich heritage, in restoration and protection of our world heritage sites, investment in our capital city Valletta as a matter of national pride and of course investment in open spaces all over the two islands – Mellieha, Marsascala, Ta’ Qali, Sliema, Marsalforn, San Lawrenz and others.

This and much more was the direct result of membership. “Much more” includes of course the support Malta and all member states received in times of crisis. This happened during the worst financial crisis in recent years that occurred in 2008 and the impact of which continues to be felt to this very day. Likewise, I should mention the incredible and unlimited support provided to us and others during the Covid pandemic, when we benefitted from vaccines made available to all member states and also with the mega millions made available to us via the EU Recovery and Resilience Fund and the loosening of fiscal rules (as against what happened in 2008!).

 

It has been 20 years since Malta joined the EU, is it all that you expected and is there anything which disappointed you?

A lot of what has happened over these last 20 years is what I, and all Maltese, expected. This is indeed good news. But there are a few aspects that disappointed me, certainly during my time as prime minister. I can mention two major issues.

The first concerns the way irregular migration has been tackled by the EU. By this I should explain that the disappointment lurks more within the EU Council rather than the Commission. I know that the Commission did try to push practical solutions towards a burden-sharing formula. But every single time this was shot down when it was put to the Council where prime ministers of all countries deliberate and decide. Of course, I am not naïve and I understand the political realities that each one of the prime ministers needs to face, but solidarity should never be reduced to a negotiating political tactic, especially when dealing with vulnerable human lives.

The second concerns the way the financial crisis was handled back in 2008. At the time, the pundits in the Commission and the IMF chose to address the crisis by insisting on the most stringent fiscal rules as a condition sine qua non to access financing. In practice, countries that were already suffering enormously were forced to adopt even more austerity measures that continued to spread suffering among their people. Fortunately for us, our journey towards the euro, between 2004 and 2007, meant that most of our important reforms had been implemented, which meant that in 2008/2009 we were one of a very small group of countries that came out of that crisis relatively unscathed.

 

How do you envision Malta developing within the EU in the near future?

The world is presently in a state of turmoil. Russia’s war of aggression against Ukraine and its people is not simply an act of war on another nation, but it is also a harbinger of what could come in the future if the world turns a blind eye as it has done in the past.

Similarly, the horrific acts of Hamas in Israel including their inhumane taking of Israeli hostages and the ongoing conflict in Gaza with the death and destruction that this is causing is another major cause of concern.

The evident weakening of the rules-based international order, together with a growing social divide within our societies, continue to emphasise the urgent need for the EU to increase its assertiveness in the global arena.

Inevitably the EU is having to face this new reality and to come up with strategies for the future. It will be interesting to examine what Mario Draghi is proposing in his report on the future of European competitiveness in parallel with Enrico Letta’s report on the future of the single market.

From where I stand at the moment, it will be crucial for Malta to continue to be alert to any proposed reforms that strengthen the EU in its mission to promote stability and resilience on the one hand, but also ensure that nothing of what makes us members of the EU is eroded or weakened.

For this to happen, Malta’s resources in the EU structure and in the EU institutions, especially the EU Parliament, will have to be boosted to include the most competent and qualified people who are well versed in how the EU operates. This is crucial because, as we have seen in these last 10 years, decisions have been taken which did have a negative impact on some of our major economic sectors, such as the maritime sector, the energy sector, the very limited and delicate agricultural sector which, apart from its contribution to our GDP, is for us more of an environmental necessity that needs constant and substantial support for its survival.

It is within this context that I envisage my country developing further in its journey within the European Union, creating new and innovative opportunities for our younger generations, our entrepreneurs, our workers and most importantly our families.