For years the controlled lira varied by one or two cents against the pound. When Malta adopted the euro it had already been strengthening since the summer against the pound and dollar. Last Friday, it was at its strongest ever. So much for that London City trader who infamously described the euro, in its early days, as a “toilet currency”. Now it is the sinking pound which must be making all those Little Englander Europhobes sick as parrots. A weakening currency consequent on the past years economic growth puffed up by unsustainable debt and the price of property.

While it is great for Maltese visiting England to get more pounds for their euros, the other side of the coin is that Malta’s tourist product and property have become more expensive for all comers

outside of the eurozone.

Three months ago the GBP/EUR rate was 1.3490, and that Lm30 or e70 restaurant bill was £52 (round prices). Last Friday the pound dropped to its lowest at e1.2645. Now the British tourist will have to fork out (forgive the pun) £55 for that dinner. As regards property, at the turn of the year £259,000 would have bought a Lm150,000 house. Now a British buyer will need £276,000 for that house, an increase of £17,000 or seven per cent in three months.

Welcome, Malta, to the world of floating exchange rates.

The double whammy is that the pound’s slide is expected to continue and British consumers’ discretionary spending is bound to reduce this year. The UK is Malta’s largest tourist market. During February there was a year-on-year decrease in arrivals of 6.4 per cent from that country. That might well be the start of a horrible downwards trend. Therefore, there should be an immediate increased focus on the eurozone markets.

However, Malta must seriously address its appearance and service standards as those epicurean Continentals are harder to please.

Alex P Galea

Woking, Surrey

England