Malta has managed the crisis well… but at a cost

There can be no doubt that Malta has so far weathered the COVID-19 crisis admirably: not just from a public health perspective – where Malta has won international accolades for its successful handling of the local epidemic – but also on the economic front. 

An analysis carried out by Columbia University in fact reveals that Malta’s fiscal response to the economic disruption caused by the coronavirus has been the most generous globally. With Malta’s spending equating to 22.1% of its GDP, the country tops the list, just ahead of Japan, in the world rankings. 

This is largely thanks to various support measures introduced by government to cushion the impact of COVID-19, most notably by paying a wage supplement of €800 per month per employee for companies that had to close as part of restrictions introduced by health authorities. 

These are all measures which cost the government money, at a time when its own revenue is set to decrease as the economy inevitably contracts. As such, it displays a willingness to spend taxpayers’ money to address socio-economic problems, even in times of economic adversity.  

This approach appears to have stood Malta in good stead in this crisis; even if, ironically,  such largesse would normally be considered ‘State Aid’, and therefore ‘illegal’ by the ordinary European rules of engagement.  

It only became legally possible in view of the EU’s decision to suspend its usual State Aid regulations, in view of the global health emergency.  

As such, Malta’s success in countering the economic effects of the pandemic – on top of its similar success on the health front, which is also due to heavy investment in the social services - also illustrates that the countries which invest their own economies, are the ones that are likeliest to emerge the least scathed. 

At a time when many people are questioning when (or whether) things will return to ‘normal’ – and, more specifically, what this ‘new normal’ is likely to be -  this offers food for thought. Will the ‘new normal’ retain the same old practices – indeed, the same economic model – that had to be suspended at the first sign of a crisis? 

If so, then the broader lessons from this pandemic would not have been learnt after all. 

Unfortunately, however, there are other aspects to Malta’s COVID-19 response that are harder to justify.  

The first is the government’s decision to close ports and harbours to rescued migrants, on the basis that Malta can no longer be considered a ‘safe port of call’. There is certainly some truth to the argument that these are extraordinary times; and therefore call for extraordinary measures. 

Likewise, it is undeniable that intransigence on the part of our fellow EU member states – coupled with the failure of the Commission to ever negotiate a permanent agreement – has left Malta with no other option but to ‘play hardbal’l. 

Nonetheless, the government  now runs a serious risk of being perceived as indirectly aiding and abetting a culture of prejudice and hostility towards foreigners: not just the migrants themselves; but also ‘the foreigner’ in general… by shifting the blame for the present migration crisis onto the EU, while pandering to the fears of an increasingly xenophobic public. 

Having said that, Malta’s decision to veto the EU’s Operation Irini - a naval mission launched to enforce the arms embargo to Libya, in a bid to stifle warring parties in the North African country – may well mark a new and important chapter in this thorny issue. 

Malta’s decision to curry favour with Turkey, in order to put pressure on Libya’s recognised GNA government to stop human traffickers, stands in stark contrast with the EU’s policy of (indirectly) aiding the rebel forces led by General Hatfar.  

By defying the common European position in this matter, Malta is clearly rattling the EU’s cage. 

This is, again, a questionable position to take; but it is also understandable in view of years of EU inaction. It's been ages since Malta has unsettled the powers that be in Europe; but sadly, that seems to be the only way to get member states acting on finding common solutions on migration. 

Lastly, questions could be raised about Prime Minister Joseph Muscat's return to an intimate part of the government's post COVID recovery team.  

Defenders of this move will no doubt point towards Muscat’s proven track-record as an economic administrator; nonetheless, it also shows that Robert Abela's continuity from the past administration also makes light of the chaos in which Muscat was forced to resign.  

Ultimately, this pandemic is being used to plaster over many cracks in the edifice of government; not just to normalise the closure of ports, and to deny migrants the ability to claim their right to international protection… but also to normalise Muscat's disgraceful exit, and using his 'feelgood' factor, in all things economic, to placate the fidgety business community. 

So while credit remains due to government for its management of the crisis so far… the crisis itself is far from over.