We are slowly but surely waking up to the reality of our country's situation. The election campaign with its better-late-than-never focus on the economy, government debt and deficits was the beginning.  Before then, denial and misinformation was the rule of the day. Previously silent gurus are now coming out in the open and joining those of us who have been voicing our view on Malta's predicament for the past year. It is now possible to criticize the EU and the Eurozone clique.

Let us now consider the Cyprus debacle. Cyprus is not a victim of the EU. Cyprus is a victim of a runaway banking system which the Cypriot government failed to control when it had the chance to do so. The banking system in Cyprus unwisely invested in Greek bonds placing short-term gain before long-term sustainability and sound judgement. We all make mistakes and this was a bad one. Cypriot politicians have surely also implemented policies that benefitted their citizens along the years, however, bad judgement in one important area of the economy can nullify all else that was well played. This is a lesson for life.

In 2011 Cyprus's debt to GDP ratio was 71.1% (Malta:  2012 = 72.5%; 2015 = 73.2%) and this considerably reduced its options. The extent of Cyprus's debt is also a wound inflicted on the country by its own politicians. There are tragedies that occur randomly and are totally unpredictable called Black Swans, however these are few and far between. Generally speaking negative outcomes are predictable and Cyprus's situation certainly falls within the latter category. Lack of insight, foresight and competence is a human fault and not an Act of God or of Germany. It is clear that Cyprus can only put hand on heart and plead Mea Maxima Culpa on this one.

The Germans are a diligent people. They work hard and pay high taxes. They have in the past accepted longer working hours and pay freezes. When did you last hear of German workers going on national strike or demonstrating in the streets of Berlin? Because of this and other reasons they have a formidable industrial infrastructure and a resilient economy. Why should the German tax payer, or for that matter any other tax payer of any other state, pay for the bailing out of bankrupt southern European states when such bankruptcy was caused by the reckless mismanagement of the economy of these same states by their own politicians?

And what about the folly of getting states that are themselves in dire financial straits to lend money to other already bankrupt states? Does anybody in Brussels see the insanity underlying such an idea?

The original motivation behind the creation of the EU was that of a common security policy and free trade. Long live this ideal, if at all still possible. Popular perception is one of a brotherhood of nations. Nothing could be further from the truth. What actually happens when the chips are down and countries are in economic trouble is that they circle their wagons and it is every country for itself. This is what we have witnessed over the past years and what we have so dramatically witnessed with Cyprus these last weeks. In such a cut-throat geopolitical situation the only rule is that of “might is right”. If a small country happens to be in the wrong place at the wrong time, it is crushed. Economic recovery for such a crushed state is then a matter of at least one generation.

In the present time an EU country would certainly be in the wrong place at the wrong time if, for any reason, it requires EU aid or falls foul of EU rules.

The common currency known as the euro was a failed project from inception. We are now 17 different economies and one currency, moving fast forward towards either total political and economic integration or a full scale break-up of the Eurozone (and of the EU as collateral damage). The former is likely to result in a loss of democratic rights and high unemployment and taxation levels provoking social unrest and possibly even violence, the latter in a disorderly exit from the euro currency and back to our national currencies. This notwithstanding that common sense would dictate a planned and orderly exit from the euro.

We should certainly be choosing our allies very carefully among the 27 member states and I would guess that we can count such allies on only one hand. My personal choice would include the United Kingdom. I can understand, to a degree, our government having to fraternise with the likes of Francois Hollande for PR purposes. I must however admit that it irks me to see our proclaimed pro private sector government on such friendly terms with a French President whose mainstream policy is to persecute French entrepreneurs, job creators  and high income earners and levying taxes of up to 75%. We can only hope that such parasitic French politics will not rub off onto our own policy makers.

Malta at best nets around 2% of its budget from the EU and this is, in the scheme of things, an immaterial sum of money or it should be. It is not a sum that should make us feel that the Eurozone dominated EU, holds our country at ransom.

We now know that the deficit for 2012 was around €226m or 3.3% of GDP. GDP for 2012 was €6,756m and growth at 3% over 2011. Deficit estimates for 2013, 2014 and 2015 are forecast at 2.7%, 2.1% and 1.6% respectively. GDP is forecast to increase by 11.7% between 2013 and 2015.  Debt is budgeted to also increase by €625m to €5,525m by end 2015 or 12.7% over the three years.  This is a very fine balancing act. In the short- to medium-term all eyes will be focussed on the national debt, deficits, GDP growth and how the electoral promises, costing around €700m over the next five years, are to be funded.

We can only but dream of a country without spendthrift electoral promises, with a Debt to GDP ratio of 67% by 2015 and a budget surplus by 2014!