Prime Minister Robert Abela said Malta has built a financial “war chest” that will allow the government to continue shielding families and businesses from global shocks, following a ministerial statement on escalating international tensions.

Delivering a ministerial statement in Parliament on Monday, Abela said that Malta will remain stable, secure and focused on protecting families and businesses as global tensions escalate, while assuring that the government will continue guaranteeing energy price stability despite international pressures.

Abela said the world is experiencing rapidly changing and uncertain circumstances, placing a responsibility on governments to ensure stability.

“In a world that is changing at a very rapid pace, Malta must remain stable and on the side of families and businesses,” Abela said.

The Prime Minister pointed to the latest escalation of tensions in the Middle East, noting that for the first time since the COVID-19 pandemic, the price of oil had surged beyond $100 per barrel, at one point nearing $120 per barrel, partly due to the closure of the Strait of Hormuz, a narrow but critical passage through which around 20% of global oil and gas supplies pass.

“These are not easy times globally and they require prudence in leadership,” he said, warning that international developments were already having an impact on economies around the world.

Abela said economists were predicting significant economic repercussions for major economies including the United Kingdom, Germany and parts of Asia, as the Middle East conflict spread across the region.

He referred to drone attacks and civilian casualties in several countries, including Bahrain and Lebanon, where Israeli strikes targeting Hezbollah were also affecting civilians.

The Prime Minister said that Malta, as a neutral country with no military bases, would continue advocating for dialogue and de-escalation.

Abela said he had spoken with European Council President Antonio Costa, stressing that the European Union’s response should prioritise mediation and de-escalation.

He also referred to the ongoing Russia-Ukraine war, saying Malta’s neutrality allows it to speak with credibility in favour of dialogue.

“Neutrality does not mean passivity, on the contrary, it means being more active than ever in advocating for peace,” he said.

Abela said the government had prioritised the evacuation of Maltese citizens from countries affected by the crisis.

He said the government had covered the costs and coordinated travel arrangements to ensure Maltese citizens stuck in the region returned safely without financial burden.

Abela also praised Malta’s diplomatic service, including the Maltese ambassador in the United Arab Emirates and the consul, who remained in constant contact with Maltese nationals in the region.

Turning to the domestic economic impact, Abela reassured families and businesses that the government would maintain energy subsidies despite global pressures.

“I say this clearly and categorically, we are guaranteeing full stability in energy prices,” he said.

The Prime Minister noted that fuel prices had remained stable for the past six years, including throughout the COVID-19 pandemic, the inflation crisis and three international conflicts.

He said that without government intervention, petrol prices would have increased by around 38 cents per litre, while diesel would have risen by 45 cents per litre.

Abela said the government would continue subsidising electricity, water, petrol, diesel and gas prices.

“Our priority is to give families and businesses certainty and peace of mind,” he said.

Abela also said Malta remains in a strong economic position, with sufficient fiscal headroom to support the economy despite global instability.

He said the government had rebuilt a financial “war chest” following the pandemic, and would continue shielding Maltese and Gozitan families and businesses from international shocks.

“In moments of global uncertainty, Malta needs strong and stable leadership,” Abela said.

Responding to the statement, Opposition Leader Alex Borg said that the Opposition would not seek to create political division and instead offered the government its cooperation in defending national interests.

Borg said the latest developments in the Middle East showed how quickly tensions in the region could escalate and how a small country like Malta can be directly affected by international events.

He thanked members of Malta’s diplomatic service, the Armed Forces and those involved in coordinating the return of Maltese citizens from affected regions.

“These moments remind us how important it is for the institutions of the state to work together to protect Maltese and Gozitan citizens,” Borg said.

However, he argued that Malta should not only respond to crises from a consular perspective, but should also play a stronger role at a European level in promoting diplomatic solutions and preventing escalation.

Borg said Malta should work closely with its EU partners to chart a clearer path towards de-escalation, while maintaining a consistent voice in favour of peace and international law.

Borg said that the Opposition supports maintaining energy subsidies, adding that a future Nationalist government would also keep them in place.

“At times of international crises that can directly affect us, Malta must speak with one voice in favour of peace,” Borg said.

He concluded by appealing for restraint and dialogue, stressing that Malta, despite its small size, has historically played a positive diplomatic role as a bridge between countries.

During the parliamentary session, several MPs raised questions about the potential impact of the international crisis on Malta, including maritime security, rising import costs and the safety of Maltese citizens in affected regions.

PN MP Mario de Marco asked about Malta’s position regarding developments involving US President Donald Trump and Spanish Prime Minister Pedro Sánchez, while other MPs focused on the implications of tensions for maritime routes in the Mediterranean.

Labour MP Edward Zammit Lewis raised concerns about the possible increase in transportation costs and food prices, noting that Malta imports a large proportion of its food supply and urging the government to provide clear assurances to consumers.

PN MP Darren Carabott asked whether the Maltese government had detailed information about Maltese citizens currently in countries affected by the conflict, and whether Malta’s diplomatic corps was present on the ground to assist them.

Carabott also asked what assistance was being offered to those who remained in the region, particularly Maltese citizens who had built their lives abroad.

PN MP Albert Buttigieg asked whether foreign military vessels had entered Maltese ports or whether warplanes or naval vessels had passed through Maltese territory.

PL MP Carmelo Abela asked about the European Union’s response to the crisis, questioning whether EU leaders would meet to coordinate a strategy and whether the bloc could adopt measures similar to those implemented during the COVID-19 pandemic, including the temporary relaxation of certain fiscal targets to support citizens.

PNMP Ivan Castillo asked whether the government had calculated the potential effect on bunkering prices and maritime supply chains, including the possible cost increases linked to the diversion of ships carrying food, medicine and other essential supplies.

PN MP Adrian Delia also questioned the Prime Minister’s reference to Malta having a financial “war chest,” asking for details about its size and origin.

Replying to the questions, Abela defended the government’s economic policy and reiterated that Malta was financially prepared to face international shocks.

Referring to comments made by the Opposition Leader that the Nationalist Party supports maintaining energy subsidies, Abela said the Opposition had previously taken a different stance.

He noted that when the PN leader was a candidate for the party leadership last year, he had described energy subsidies as “short-lived” and warned there was a limit to how long millions could continue being spent on them.

“The question here is credibility,” Abela said, arguing that the government had demonstrated that it could deliver on its commitments during difficult periods.

He also referred to the 2008 financial crisis, saying that at the time the burden had been placed on families through rising costs.

“Do you think the Maltese people will forget when prices were raised?” Abela said.

The Prime Minister said that Malta’s ability to maintain subsidies and economic support measures stems from the country’s strong fiscal position, pointing out that the national debt currently stands at around 46.5% of GDP, giving the government “headroom to manoeuvre.”

Abela said the government would continue investing whatever was necessary to shield families and businesses from international inflation.

He added that if imported inflation were to materialise, the government will reactivate mechanisms previously used in 2023 during the inflation crisis, including schemes aimed at stabilising prices.

The Prime Minister also referred to the government’s price stability scheme for food products, recalling that when the government introduced price caps on hundreds of food items, the Opposition had criticised the measure and sided with certain importers instead of consumers.

“If necessary, we will once again implement measures that have worked in the past,” he said.

Abela also urged the Opposition not to spread misinformation regarding the work of the Armed Forces of Malta (AFM).

He referred to reports about an explosion involving a Russian vessel, saying misinformation by Borg had suggested the incident took place in Malta’s search and rescue (SAR) zone, when in fact the attack occurred in the Libyan SAR zone.

Abela accused Borg of doing this on purpose so that foreign investors would be discouraged.

Abela also said no warships or military vessels had passed through Maltese territory in connection with the conflict.

Abela said the situation would be discussed at an upcoming European Council meeting on 19 and 20 of March, adding that the EU’s response was still evolving.

He stressed that the Maltese government would continue focusing on the country’s priorities, including the implementation of Vision Malta 2050 and the Budget, and said that the government’s economic plans would proceed despite international uncertainty.

In a follow-up question, Carabott again asked how many Maltese citizens remained in countries in the Gulf region.

Abela said Malta’s diplomatic corps, the Deputy Prime Minister, the Permanent Secretary and himself were actively involved in monitoring the situation.

He referred to an incident in Lebanon, saying the government was doing everything possible to maintain discussions and ensure Maltese citizens in the region remain safe.