PL MEP Alfred Sant believes that the EU is getting transformed into a defence union.

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

MEP Sant, who was the Opposition leader at the time of Malta’s accession to the EU and who had led a campaign in favour of partnership rather than membership, responded to questions by The Malta Independent on Sunday about Malta’s time in the EU, as well as his thoughts on the future.

 

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

In terms of economic development, the agriculture and manufacturing sectors have had a hit. The former has lost the protective framework it needed to consolidate and modernise, while manufacturing has lost traction except for a few sectors and has been in relative decline.

By contrast, financial services, after an initial decline just post accession, have been, along with tourism and internet gaming, the real drivers of Maltese growth.

In budgetary terms, the initial flow of funds from the EU helped to bridge over the shock of full implementation of the EU acquis to the economy. By the time the 2008-2012 crisis struck, their impact was much less effective.

Later, project tied investment flows, needing to be of a cross-border nature under EU rules, were too tied to main road public construction projects, which has been the cachet of the last 12 years, serving as prop to the huge traffic development of the same period. Thankfully, in more recent times, the emphasis in EU-funding priorities has moved towards digitalisation and measures to combat climate warming, which has provided better financing scope for a wider range of long-term investment proposals from Malta.

Membership of the euro since 2008 has continued to restrict Malta’s leeway in devising policies that reflected the island’s reality. This worked to our disadvantage under the Gonzi administration during the 2008-2012 economic and financial crisis.

Over the years, the gap between what Malta paid into the EU coffers and what it got by way of transfer funds narrowed. Today it is fair to say that we are net contributors to EU funds, though by amounts, that for other member states, are insignificant.

In social terms, EU rules have helped to set a better focus on social policy issues but in reality, Malta already had social protection systems that were superior to those required by the EU as a minimum. The Schengen system has been crucially useful in enabling more Maltese to travel, live abroad and get out of their insularity, not least for young people. However, the arrival of low-cost air transport was also a major contributor to this.

In cultural terms, the Maltese people have become more aware of and open to European styles and usages, but again contributing to this were the huge advances in communication technologies. During the Muscat administration the changes made to “minority” rights put Malta at the forefront of “progressive” legislation (with the exception of abortion) even within the EU.

On the whole, Malta’s development has effectively been concentrated in areas where there are no really binding EU rules (financial services, gaming, tourism) and in macro terms, it has stagnated or declined where there are (farming, industry).

However, as well, the effects of membership have been masked by/are indistinguishable from two other major trends that have been rolling – low cost travel and digital communications. Overall, Malta has right through been in the position of a policy taker.

 

 

Do you think that in these past 20 years Malta's voice has been given enough importance in EU institutions?

The EU has played by its rules in so far as Malta was concerned, which is what was to be expected. Malta’s voice was given the importance of its size in the EU configuration, as the smallest member state. For instance, some Maltese complain that on immigration, our interests have been disregarded. The same complaint is made in other Mediterranean “frontier” states but to be clear, the issues related to this matter have always been dealt with according to what the treaties we signed, prescribed by way of how problems were to be tackled.

An overriding problem has also been that when new proposals or amendments to existing proposals are being made for EU action, Malta is practically always in the position of asking that special arrangements are made to cover its situation as it will be badly hit; all going back to our peripheral situation in Europe, the fact of being an island and our size. This creates negotiating challenges for the Maltese side, which frequently has to prioritise what it must contest most from a long list of requirements for exceptions.

 

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

The question is perhaps badly put. Better ask how the EU could develop and how would this affect Malta.

There is no doubt that the EU is getting transformed into a defence union, with a significant component of militarisation as part of the package.

Economically, this will divert EU resources away from infrastructural and cohesion funding towards military spending, from which Malta cannot benefit from – we thankfully have no armaments industries. It will also increase the need for the EU to devote more finance to its operations, some of which would come from new “own resources”, better called new taxes that would apply at a Europe-wide level.

On a political level, there is no doubt in my mind that such developments would negatively affect Malta’s status of neutrality, which is a very serious matter (for us, not for the EU or NATO).

Then, given that there is consensus that the EU should enlarge its membership to the Balkan states and others, the need for greater effectiveness in the adoption of EU positions becomes evident. This will increase the pressure for removal of unanimity in decision-making and reliance on qualified majority voting at membership level. It is likely that this method would then cover corporate taxation matters with an impact on how we run financial services and the gaming sector, both of which many EU actors in the Council, Commission and Parliament, consider with deep suspicion.

We need to be aware of all this and be prepared with a plan (shared across the political, business and social sectors) that clearly sets out what we want and how far we can go. Also, how best to proceed in realistic ways to achieve our aims. In this, it would be important not to give up long-term goals in exchange for short-term gains as has happened in the past (like for the arrangements made to cover agriculture on Malta’s accession to the EU).