Brexit is now a reality. No matter how illogical it seemed for one of the most influential member states to leave the decision-making table of the world’s leading economic club, it did.
While most of the discussion right now surrounds the practicalities, the duties and moving business, the real cost of Brexit can only be assessed in a few years’ time, when one can weigh the effect of an open European economy not being able to shape EU decisions on business, consumer and environmental law among others.
Brexit in fact, gives us a golden opportunity to calculate the cost of not being within the EU, the cost of non-Europe, as Brussels bureaucrats would put it.
While we let that vintage age for future enjoyment, this is indeed the time to consider particular adaptations to the new brexit reality in Malta. We all must adapt in different ways. It is indeed legitimate to see one’s own opportunities in a shifting scenario, just like Mr Johnson senior, father to the current British Prime Minister, who is now in the process of becoming a French citizen to bypass the effect of his son’s policies.
Like Johnson senior, Malta too needs to adapt, reconsider emphasis, trade and affinities to secure greener paths for all those which make us a nation. Affinities are indeed hard to budge. We share a lot of common heritage with the brits. Even if you put aside the stories of our grandparents on how they fought the war and famine in the second war, the UK has been a partner even as recently as Malta’s parcours towards EU membership. Insiders of our first years as EU members would also share stories on how the UK helped make Malta’s case in critical junctures even after accession.
It is never nice to revise old friendships, and maybe we should not. Malta can still strive to have the best of relationship with the UK. The new Brexit setting does however put a few chapters of our current exchanges under significant stress. As the details of the hundreds pages long withdrawal agreement come to be clarified, we realise that Brexit does actually mean Brexit and hence a new customs duty to be paid on business transactions and private sales and the end to student exchanges under the Erasmus programme to mention but two evident setbacks.
For trade transactions, business with the UK will become more complicated. Certainly so when compared to the ease of free movement we enjoyed so far. Some have compared trading with the UK to trading with China. Indeed, China and the UK are now on similar footing with regards to trading arrangements with the EU. Private consumers conversant with internet shopping have a few experiences of V.A.T. and customs duties being imposed on private shipments from China. Same applies as from 1 January to UK sales, where, according to last available information, the Maltese customs are to impose V.A.T. on any package over 22€ and additionally, customs duties on any sale over 150€.
Businesses need to add regular paperwork to that, with three types of customs declarations being mentioned so far and the complexities of avoiding double V.A.T regimes. The sudden bureucracy hence adds up to the cost of mentioned duties.
Before joining the European Union, Malta traded mainly with the UK. With accession, our trade numbers spread more evenly to business with France, Italy, Germany and the other EU partners. Brexit will probably further spread our trade numbers towards these other European partners as free movement continues to attract with its simplicity and lack of financial overheads.
Without doubt, Union membership means much more than trade and business. In 2003, the youths of the time and their parents saw Union membership as a way of opening horizons beyond our borders. That dream became true for thousands who participated, directly or indirectly in EU projects and in the new economic models made possible through EU accession. A few thousands also experienced the European added value first hand through the Erasmus experience, with more than seven thousand Maltese youths doing part of their studies in other European universities or on job training placements in European capitals. These thousands of Maltese youths came back with the ideas and experiences gained in other settings. Many of those ideas are now seeding in Malta, opening up our country in an invisible but very efficient way to new growth.
Brexit seems to be putting that Maltese and EU success story into question. Why? Because the Maltese feel far less threatened at the prospect of living abroad on Erasmus if that abroad speaks English and is made up of places and things that make up part of our culture in Malta. The great majority of Maltese students who applied for Erasmus, in fact, applied to join programmes in UK Universities. For many Maltese, UK universities will be better known and trusted to let’s say French, Belgian or Dutch, even if the latter may have a better international rating when compared to the UK colleges.
That will have to change if we want to avoid our current generation of youths becoming the unintended victims of Brexit. The last agreement, in fact, ends the UK’s participation in Erasmus.
Malta’s current participation in the Erasmus programme stands at 5%. That is only one in 20 of our youths benefit from the European experience. Before Brexit, that already called for more efforts to increase Malta’s participation, especially now that the EU budget has more than doubled the available funding for a wider set of Erasmus possibilities, from secondary schools, to technical schools, to universities and workplaces wherever that might be.
Brexit now further amplifies Malta’s Erasmus challenge. W e must act with undue delay on two fronts. First, there is a growing number of English taught courses in a number of universities in the continent, particularly in the Netherlands and Germany. We must help our youths localise these according to their areas of interest. Secondly, we must equip our youths better for study placements in non-English language settings.
I myself have gone through the pains of doing part of my studies in French. Language difficulties may have cost me a few points in some credits, but the satisfaction of braving the language barrier made up for that in the end. At least half of our University graduates have French, Italian or German as a subject at secondary level. We must build on those skills, possibly through language booster courses right before departure, to extend the available opportunities for our youths.
Like many sad things in life, we did not have much of a say on Brexit, but we can have the last word on how we adapt to it. Let us turn this into an opportunity to open our horizons wider.
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