Europe, 10 years later: Sant, Sammut, Pace

Alfred Sant, former Labour prime minister 1996-1998, had opposed EU membership in 2003. He is now a candidate for the European Parliament on the Labour ticket

As we celebrate our tenth anniversary as a European Union member state there is a justifiable question to ask – how did we make out: are we better off?

One can deal with that question in two ways. One either quantifies, by rule of thumb, the extent by which we have cashed in on the economic, social and political prospects seductively promised in the run up to signing up to the  EU Treaties. Otherwise we can consider in some detail the way different sectors of the economy have fared. I much rather take this latter route.

Economic growth

Let’s, for a start, consider economic growth. If one compares results for the decade before membership with those of the last ten years, growth, in real terms year on year, ranges from less to much less. One must admit that even in the better decade growth was slipping. Admittedly from 2008 onwards a worldwide recession began to have a marked effect on our struggling economy. What saved the day in the last few years was the island’s popularity with online betting companies and financial services, all of which spurred the economy into added growth.

Foreign trade

In terms of imports and exports our purchases from Europe grew at a far greater rate than our shipments. As a result our trade deficit with Europe grew extensively even when one takes oil shipments out of the equation.

Industry

The number of outfits which traditionally relied on the domestic market shriveled, turned themselves into importers of foreign goods, or closed down altogether. Exporting companies have reduced their workforces. There were a few foreign newcomers mostly pharmaceuticals and in the field of aircraft repairs and maintenance. But there is no denying much of the strength of our industrial sector has sapped.

Agriculture and fisheries

There has been a significant reduction in the number of farmers and fisheries, almost by half. The number of outfits involved in animal and poultry husbandry fell drastically and profit margins for those that remain are bleak and uninviting, which affects fishermen in the same way. Only government subsidies help keep producers with their chin above the waterline. Milk producers tell a far better story.

Tourism

This has followed the traditional pattern with the better years followed by years of lean results. Several factors account for the way tourism developed which include the arrival of low cost airlines, online holiday bookings, a diversification of markets that could have yielded better results, and the increase in the arrival of foreign workers from Europe seeking jobs in this sector.  

Financial services

In the first three years after joining the EU, results were dismal as the industry chartered a way through the new conditions. Once it recovered the industry gained a sprightly step. There are those who argue this was a direct result of Malta’s EU membership. It could have been otherwise. In that case there would have been no shortage of those arguing the industry flourished specifically because Malta had remained outside the EU. Who knows?

Online betting

With the arrival of several foreign online betting companies this has, in recent years, witnessed undeniable galloping growth. As yet the European Union has no declared policy on whether or how to regulate the industry.

Investment

The proportion of public and private investment in the economy continued to decrease as it already had been doing during the ten years previous to Malta’s membership in the European Union.

Gozo

By most standards Gozo, compared to the rest of the country, has lost much ground. Manufacturing industry, farming and fisheries dwindled and tourism went through years of hardship before it began to recover recently. There was a fall in productive employment on Gozo whilst the number of those seeking jobs in Malta grew. Gozo trailed behind even similar small islands within the EU.

Employment

The creation of new jobs remained in the same level seen in the decade before we joined the EU. At times there were even less new jobs and this had nothing to do with the impact the international recession had on Malta. At the same time a considerable number of Maltese nationals took up jobs offered by EU institutions largely in Brussels. But in effect there was a loss of productive jobs in- including in manufacturing – but there was a rise in employment in the services sector. Part-time jobs also cruised ahead even when these were the only type of employment available. There was also an increase in jobs that offered no predictability nor security, commonly known as precariat.

Wages

Certain categories, largely technicians and professionals saw a substantial increase in their wage packets. For the rest, wages remained untouched or dipped further. On average incomes for families took a serious turn for the worse.

European Funds

Whilst the Government, during the first four years, could wilfully spend its EU funds as it pleased Malta naturally did well as a net beneficiary. The picture changed dramatically when the arrival of EU funds was conditionally latched to projects for which the Maltese were made to dig deep into their pockets. EU funding as a result levelled off. There were times when tiny Malta, against all predictions, became a net contributor. There were instances when funds earmarked for Malta were forfeited. Matters improved in the past two years with a greater pick of Union funds. But there has also been a hefty increase in the fee the island the EU – an annual €85 million.

The Euro as a national currency

We joined the Euro on the 1st January 2008 on the eve of the most dramatic crises to hit the Eurozone. That crisis gave birth to deep and wide changes in the governance of the Eurozone in order to bail out countries in trouble like Greece and Portugal then facing total collapse. Malta participated in these rescue efforts by providing financial loans and guarantees. In total Malta has committed €1.2 billion in safeguarding the survival of the Euro. Given the size of the island’s population this is one of the heftiest financial commitments made by EU member states.

Cost of living

A strange phenomenon seems to be at work here. The cost of living has continued on its upward trend more so when the cost of living index in other EU member states dips. It also works the other way round. When the index picks up elsewhere it slips back in Malta. It seems we still have to discover what it is that domestically spurs prices to rise. Whatever the case in the main these remain higher than in the rest of the EU.

Standard of living

As in the case of our country’s economic performance, people’s living standards seem to operate on two levels. There are those whose standards have seen significant improvement and those for whom any improvement has either sailed over their heads or are, sadly, worse off. The number of those living on the edge of poverty has increased- here as well as in the rest of the EU.

Consumption

In the main there is now a wider choice for the consumer.

Student Exchanges

In general terms these have increased but it must be said there were instances when EU funds were lost due, singularly, to atrocious inefficiencies.

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These I believe are the main aspects to consider when analysing what happened – and what did not – in the ten years we have been an EU member state. I have intentionally steered clear from passing judgment on whether people are better off or not.  We are at a time when it is best now for people themselves to make their own minds. 

The only remark I will make is this. The calibre of lifestyles wage earners enjoy must be the only measure that gauges how well we have travelled the chosen path. It is for white and blue-collar workers, the middle classes, pensioners and the elderly to decide. I shall leave it to readers of MaltaToday to make their own rational objective judgment.

Media expert and senior lecturer at the University of Malta, Carmen Sammut, said that Malta’s membership to the European Union not only had an effect on national structures but also on individual people’s lives.

“After ten years of wide-open mobility we have greater career and lifestyle choices and many seem to enjoy unbounded educational prospects,” she said. “If we take the University, for instance, it has become less insular with a growing number of European students and a growing presence of European academics.”

“Education and work possibilities have indeed improved for higher achievers,” she added.

Sammut said that EU accession also helped to increase the momentum for secularization, with issues such as divorce and civil unions ‘unthinkable’ as in the past the Church enjoyed hegemonic control over many aspects of social and political life. “A European mentality helped shed former taboos and triggered public debate and change. These advancements are partly the results of a stronger civil society.”

NGOs have been granted “greater lobbying power” since Malta became an EU member with their access to EU funds serving as evidence of this. “They now have better opportunities to network and establish professionalized set-ups in fields of civil rights,” she said. “These range from women’s organizations, LGBTI and migrant rights to long-established eNGOs that gained a stronger foothold.”

Sammut further argued that whereas in the past, environmental concerns were subject to the idiosyncrasies of various lobby groups, the EU set and structured targets in place. “It has put national politicians on their toes on aspects of sustainability and climate change, whilst some traditions have become harder to justify,” she said.

“The various co-financed projects have also helped revitalize the urban environment through the facelift that was undertaken in the Grand Harbour area – especially Valletta – and the restoration of other heritage sites.”

Sammut, however, was less optimistic about Malta’s membership in the EU when it came to other issues such as irregular immigration. “In ten years Malta has not been able to convince its European counterparts to amend the Dublin II Agreement,” she said. “This is a contentious point.”

Describing this as the cause of “significant public resentment”, Sammut said that the Maltese Islands was attractive to boat people during its drive for EU membership with the country’s ‘pull factor’ increased as an entry point into Europe. “This introduced various opportunities and challenges related to the integration of new communities.”

Sammut indicated that the Maltese were still assessing Malta’s accession to the European Union from a “very national perspective”, with the themes addressed during the ongoing MEP campaign serving as evidence of this.

“The behavior of some MEPs is often typical of our polarized political culture,” she said. “Although we continuously punch above our weight in a European Parliament of 736 seats, some MEPS are still ready to score political points even if they have to hit below the belt in European for a.”

In an attempt to combat this, Sammut outlined her wish that autonomously media organisations would, in the future, be able to afford to invest in Brussels-based correspondents. “Unfortunately, information is still filtered by the powerful institutions and subject to a lot of spin. Ideally media organizations should dedicate resources to scrutinize all institutions and raise significant matters to the attention of the public.”

Professor Roderick Pace is head of the Department of European Studies at the University of Malta

The first decade of membership was a positive one because on the whole Maltese society changed in a positive direction and the economy continued to grow.

There is still a long way to go but the pool of young, educated and independent minded people is growing which is the source of hope for the future. Membership has not only opened these islands to European influences but integrated us more in the global system from where various other influences arise. The ground is still shifting. 

The implementation of EU law and standards has accelerated the development of certain aspects of Maltese society which were still in their germinal or early stages a decade ago, such as a greater love for environment, the quality of life, standards, product labelling, health and safety, gender equality and a stronger urge to travel far and wide.

But although the appreciation of the environment has increased, our territory has been butchered by development – so preserve your photos, for that is what will survive in the end. Membership ushered in more liberalization in the travel sector which together with lower cost services facilitated movement. Students went abroad to study in larger numbers and this gives me hope.

I am disappointed by the impact of membership on our politics. In some ways we have still to be socialised into doing things the ‘European way’. Politics remain acutely adversarial and intolerant even when a much softer approach is apparent at the surface.

Many of us still expect the EU to do things for us by direct intervention, but then it is the same in our expectations from state and government.

I expected membership to demolish more quickly our insular mentality, but it is not happening fast enough. Deep rooted cultural traits are not easy to eradicate. We do not participate in the great European debates and we hardly give a damn about what kind of Europe we would like to see emerging in the next decade.

But blood will be spilled if someone dare touch the festa!

In the economic domain there are still serious issues of governance and wastage. Where public finances are concerned my expectations were that Malta would have to operate within the strictures of EU monetary policy which would force her to live more prudently, instead we are still behaving as if tomorrow will never come.

I think we have become more materialistic, more is better than just what I need. We are difficult to understand in many ways: generous when giving, but we also have a streak of racism and leaders pander to it. With membership the doors of our society were thrown open but we were unable to handle the pressures of multiculturalism.