Together with my wife who hails from the northernmost part of the island with views and countryside that take your breath away particularly in winter, we opted to live midway between my hometown and hers. Today we have been living in a pleasant suburb, notwithstanding the shabby state of our street, for more than two decades. It was our conscious decision to split the distance between our families’ hometowns, where we live today. Today we do not regret it. We live in a quiet neighbourhood surrounded by very pleasant friendly neighbours. Had it not been the case we would still have had the option of moving to another village or town. This cannot be said of or done in our neighbouring countries.
Geographically, our island is situated at the very centre of the Mediterranean Sea with neighbours including members of the European Union to the north and countries from the Arab League to the south. Rightly or wrongly, we had our national differences with our neighbours on either side in the past. Today, we have learnt how to best use our geographical position to our advantage making use of different means, mainly diplomacy and constructive bilateral discussions.
During the recent Arab Spring revolution everybody on the island was concerned, albeit for different reasons. The dust has not yet settled in the Arab countries and local leaders do well to continue to monitor each unfolding event in these neighbouring countries. Malta has not only expressed words of solidarity but took action with many initiatives to help the many people in distress in the neighbouring Arab countries.
On the European Union side, we have grown accustomed to seeing rioters, particularly in Greece, going on the rampage in city squares and streets, while police officers try to bring law and order as the country moves one step closer to anarchy each time its leaders fail to take the necessary, harsh economic decisions to avoid an economic free fall
Portugal, Spain, Ireland, England, France and Italy all suffered the same fate but with different degrees of rioting. Unfortunately, the number of unemployed workers in European Union countries remains high, and has reached the 23 million mark. This is further compounded by the European Union leaders warning of the risk of yet another recession with a dismal economic growth forecast at 0.5 per cent in 2012 in the euro area. Economic growth is expected to pick in 2013 with 1.3 per cent in the euro area.
This is corroborated by the International Labour Organisation’s recently published report “World of Work Report 2011”, which clearly indicates that the world economy, which had started to recover from global crisis, has entered a new phase of economic weakening. Economic growth in major advanced economies has ground to a halt and some countries have re-entered recession, notably in Europe. Growth has also slowed down in large, emerging and developing countries.
Closer to home, Italy has made world news. It could not hold its breath any longer and, as the fourth-largest economy in Europe, a meltdown in Italy could have a massive impact on the European Union. At present, Italy has a massive gross debt of roughly €1.9 trillion, and a debt to GDP ratio of 120 per cent. The country is widely considered to be too big to fail but it may also be too big to bail. Austerity measures had to be taken to revive Italy’s economy. Parliament was convened and austerity measures approved. These included pension reform, plans to increase the retirement age from 65 to 67, the privatisation of state-owned companies and sale of state-owned properties, and investment in infrastructure among other measures.
The structural reforms demanded by the European Central Bank and the European Commission had to be brought in without further delay.
In this depressing economic scenario that surrounds Malta, it is encouraging to note the fine balance achieved between most of the social partners. It seems that most budget measures for next year were adopted to strike a fine balance between the social policy values that are enshrined in our society and the governance and vision of our economic and financial policy-makers.
It is promising to note that the financial and economic tools currently available are used to serve better different members of our families while keeping the national deficit under the three per cent mark to ensure that Malta will retain the necessary financial flexibility and cushion.