Blame it on Brexit

Brexit has had some unusual ripple effects across the European Union, as I’m sure you’ve all already noticed. 

Never mind the immediate economic and political consequences – the plummeting pound Sterling, the global financial uncertainty, the sudden spike in earthquakes, volcanic eruptions and tsunamis all over Europe… and above all, the mysterious emergence of that seven-headed sea-monster, with the number ‘666’ tattooed on each forehead, from the depths of the North Atlantic. It’s the less obvious, more subtle effects that intrigue me.

Here in Malta, for instance, ‘Brexit’ actually got us to re-evaluate our entire understanding of what this whole ‘EU thing actually is’. And it seems that a thorough re-evaluation was sorely needed, too. Because even if we were at each other’s throats over the question of membership just 12 years ago… everyone has now clearly forgotten everything they ever said, thought and did about the issue until just the day before yesterday.

Consider this comment by Malta’s Foreign Minister George Vella in reaction to Brexit this week. “They [Nigel Farage and Boris Johnson] are irresponsible because [if] I’m going to push a movement, I should know what I want from it and [how] to lead it there... I would have expected [them] to at least have a proper plan for Brexit… citizens who were looking for a leader have ended without one.”

Well, it’s hard to actually disagree with any of that. Those two bungling ‘leaders’ really did ‘push a movement’ without ever pausing to consider Phase Two: i.e., how to actually implement it. Equally true is the fact that they both scurried off with their tails between their legs, just when the people who believed in their vision needed leadership the most.

What intrigues me, however, is the identity of the person making all these perceptive observations. George Vella is today the foreign minister of a Labour government that heralds EU membership as (and this is a literal quote from Joseph Muscat) “the best thing since sliced bread.”

But that’s today. Yesterday, on the other hand, the same George Vella was part of the leadership of a party that likewise had ‘pushed a movement’ – ‘Partnership’, if you’ll remember – without any real clue of how they’d ever be expected to implement it, had they actually won the referendum/election in 2003.

Interestingly enough, Labour’s ‘Partnership’ plan was almost indistinguishable from the one floated more recently by Farage, Johnson and the rest of the “irresponsible” Brexiters. Johnson, for instance, had intimated a deal whereby Britain could remain part of the single market, without taking on board any of the EU’s rules regarding freedom of movement (among others). How different is that from the ‘special relationship’ with the EU, as envisioned by Vella pre-accession?

Meanwhile, another spokesman for the UK’s Out campaign, Michael Gove, this week tweeted (and received a tonne of flak for it) that the idea was to “to renegotiate a new relationship with the EU, based on free trade and friendly cooperation.” Well, that could just as easily have been Alfred Sant talking at any of a few dozen mass meetings in the run-up to the EU referendum… with George Vella enthusiastically applauding in the background.

In both cases, the nature of this ‘special relationship’ was never identified with any clarity. Just like Britain today, Malta’s then Labour opposition had rejected any of the known alternatives to membership: like joining the European Free Trade Area, along with Iceland and Norway. This means that any ‘Partnership’ agreement with the EU would also have had to be negotiated from scratch. 

Which in turn makes me wonder: why did Vella expect the EU’s response to that proposal (which, incredibly, is now his own response to Brexit) to be any different from the flat rejection received by Britain within literally minutes of the referendum result?

What, in a nutshell, is the difference between the declared objectives of the ‘Brexit’ campaign, and the ‘Partnership’ proposal pushed by Alfred Sant, George Vella and co. until 2004?

As things stand, there are only two major differences that I can see. The first is that the United Kingdom – for all its current economic and political woes – is still one of the top 10 largest economies in the world. Even if its demands are unreasonable, and cannot possibly be met by Brussels (it’s like that limerick about the ‘fly in my soup’: the remaining 27 member states would want the same deal too)… at least the UK has a little clout to bring to the negotiating table. 

But Malta? What clout did Malta think it had in 2003? What sort of arguments would George Vella – who would probably have led the negotiating team in person – have raised at that table, to convince the EU to offer us the sort of exclusive deal it has only just denied to Britain? 

This brings us to the second major difference. Partnership lost in 2003. Brexit, on the other hand, won in 2016. 

This also means that the failure of the latter project is self-evident and staring us all in the face… the immediate consequences are known, and the impossibility of the plan itself laid bare for all to see. In the case of Partnership, however, we will probably never know – still less be able to measure – the full extent of the possible consequences.

What would have happened had Labour won that referendum? After all, it came fairly close. Would Muscat now describe the EU as the ‘best thing since sliced bread’… only to quickly add: ‘such a shame we didn’t join when we had the chance’? And would Vella still be lambasting Farage and Johnson today… 12 years after his own doomed (and almost identical) project met with exactly the same fate?

Who knows? Judging by the way a political party as gargantuan as Labour can simply turn around and disown all its past convictions at the bat of an eyelid… anything is possible, really.

In any case: the above was just one aspect of the somewhat bizarre effect Brexit has had on Malta’s perceptions of the EU. There were others. For instance: it is evident from the near-unanimity of local reactions – anger, dismay, a backlash against the entire democratic process, etc. – that a country which joined the EU by a mere whisker in 2003, is now probably the most Europhile of the 27 member states. 

It is not just George Vella who has evidently forgotten all his past views on Europe… it is also the 48% that voted ‘No’. What caused this remarkable change in public attitude? Among enlargement countries, anti-EU sentiment was highest by far in Malta in 2004. Today, it is the lowest. That is in itself an extraordinary political phenomenon by any standard.

This is where things start to get interesting. In arguments with the few dissenting voices here and there, most qualify their support for the EU in terms of Malta’s economic progress: record employment figures, record growth rates, record increase to national GDP, etc.

There is little point in disputing the figures in themselves… though one could (and some do) question the causality/correlation with EU membership. I myself wouldn’t bother, though: I see a clear correlation between economic growth and Malta’s status as an EU member state. It can be summed up in one word: immigration.

Strangely – for a country which only ever uses the word as an expletive – Malta’s economic miracle can in part be pinned down to a plethora of small, medium and large enterprises that have relocated here thanks to the freedom of movement allowed under EU regulations. It may not have been the invasion of Sicilian hairdressers predicted by Labour 12 years ago… (though then again it might: I only cut my hair once every three years, so how would I know?). But restaurateurs from all over Italy? Handymen, builders, plumbers and electricians from all over Eastern Europe? And that scarcely noticeable contingent of betting agencies, I-gaming industries and financial services that have been quietly pumping millions into Malta’s GDP these last few years?

Those are among the contributors to the success of Malta as an EU member state. Naturally you could add all sorts of other categories to the list. (Like strippers and lap-dancers, for instance. You don’t want to leave out strippers and lap-dancers, just because their contribution to GDP is about as microscopic as their G-strings… )

But how did Malta succeed in attracting all this foreign investment, where other countries failed? Well, this is what makes it so interesting. Taken as a long-term vision, the ‘European project’ foresees the gradual harmonisation of internal European rules and regulations governing, inter alia, taxation. Malta is one of a minority of EU member states to vehemently oppose fiscal harmonisation, because it (rightly) construes that as a threat to its competitiveness in attracting shady industries like the I-gaming sector. 

This minority has incidentally just got a lot smaller with the loss of the UK; and this, too, has fuelled the backlash against Brexit and its supporters. How dare the British leave us in the lurch like this? How dare she betray us, in our perpetual war against transparency and fiscal fairness across Europe?

What this effectively implies is that Malta’s ‘success’ as an EU member state actually owes quite a lot to Malta’s basic disregard for the same ‘values’ that the EU is supposedly built on. If we have prospered where others have suffered, it is partly because we insist on retaining a pre-EU accession outlook on all the things which help us make money: like adjusting our tax rates to attract investment (at the expense of other EU member states, naturally). 

On every other issue – the environment, civil rights, human rights – oh, on those we’re as European as the lot of them. Even more, in fact. But when it comes to pounds, euros and centimes … the old ‘medulla oblongata’ kicks in, and we instantly fall back on our old, primal money-grabbing instincts. 

So we find ourselves resisting harmonisation and greater European integration (two major current aims of the EU) tooth and nail… to retain the level of tax sovereignty usually associated with non-EU member states.

Even without factoring the basic irony in all this – i.e., the fact that most of those bashing Brexit today were just as incensed by Panamagate, which revolves around precisely the same tax-incentivisation issue – there is an obvious question to be asked.

What happens when our luck finally runs out, and the EU clamps down on all the loopholes that made our ‘economic miracle’ possible in the first place? Who will we blame then?

I know: Brexit! It’s all the fault of those pesky, duplicitous Brits… just like the good old days.