Brexit Q&A | 'Malta needs Britain to remain strong economic partner' - Gonzi

What is the political future of the European project? Is this the advent for the disintegration of the EU or will it become stronger?

The European project remains a viable proposition. The principles it represents and the values it embraces remain unchanged. It stands for respect for human dignity and human rights, freedom, democracy, equality and the rule of law.  These principles have brought peace and prosperity for all member states and it is an undisputed fact that as a result EU citizens have gained immensely. Brexit however has shown that there is a disconnect between what the EU stands for and what our citizens expect from EU leaders.

So far EU political leadership has failed to respond adequately to the immigration crisis. EU leaders have failed to practice solidarity where and when solidarity was needed. They have allowed austerity to dominate its economic policies even when it was clear to everyone that flexibility was necessary. Some leaders have insisted on one-size-fits-all model, forgetting that Europe stands for unity in diversity. The stark reality is that the political future of the European project depends very much on its political leaders – not those in Brussels but those leading its member states.

If our Presidents and Prime Ministers shoulder the responsibility for their collective political decisions, if they do so in a manner that addresses the major concerns of our citizens: jobs, security, terrorism, education, health – then the EU project will have a solid basis for the future. If not, then the very raison d’etre of the union will be placed in doubt and the consequences will be dire for everyone.

Do you think Britain will prosper or flounder outside of the EU?

The British people are resilient. Their economy has some very strong fundamentals and their democracy is a beacon for all the nations in the world. There is no reason why Britain should flounder outside of the EU. In my opinion, it would have been much more successful in the EU than out of the EU. But this is now besides the point.

For us in Malta, it is crucial that we understand the importance for Britain to be successful even outside of the EU. The fact that Malta will have the Presidency of the EU during a key stage of the negotiations for the exit, places more responsibility on us to be able to deliver a smooth transition which is not inspired by hard feelings, nostalgia or emotional knee-jerk reactions.

We have a responsibility to send a message for constructive dialogue that benefits those who are in and those who are out – of course without diluting the fact that whoever is out must face the logical and natural consequences of that decision.

Will the EU now move away from the neo-liberal policies which have characterised the bloc in the last two decades?

There is one fact that needs to be highlighted: the upheaval caused by the financial and economic crisis that started in 2008 has still not subsided. Most global economies are still struggling to regain what was lost in these past six years of major turmoil that has caused record unemployment especially amongst young people including those who are university graduates.

This fact, mingled with the trepidation caused by record migration flows and the fear caused by acts of terrorism of the worst kind, has created an anti-establishment feeling which is reflected in a lot of countries including those in other continents. We have seen this happening in national and local elections held during these past months in several countries. The EU must understand that there has to be a revision of its policies. Even though these might have worked so well in the past, times have changed and circumstances dictate a new and fresh citizen based approach.  Let me be clear on one point, however : populist approaches are a formula for disaster.

Citizen-based approaches mean policies that target the common good in a reasonable and fair manner. This is what Malta managed to do during the economic and financial crisis that peaked between 2008 and 2010. We managed to keep Malta on an even keel when our neighbours were (and in some cases still are) on their knees. We succeeded in the worst of circumstances and with all the odds loaded against us. But we managed to do this because we sought policies that were inspired by the common good rather than the short-term interests of one sector against another.

Will other countries now feel that they can renegotiate EU membership?

I expect that member states will now react in a constructive manner, arguing strongly for a change of direction as well as updates in policies that deliver real and tangible benefits for our citizens. In all fairness, one must state that in the past months – even before Friday’s referendum - President Juncker had already launched a host of initiatives that are designed to stimulate economic growth and create jobs. More needs to be done.

Will other countries want out?

I do not believe so. What I expect in the short term is for Scotland to demand a second referendum for its independence which, if successful, would allow it to apply for membership in the EU. Inevitably there will also be political upheaval in Northern Ireland. The immediate issue therefore is not whether other countries want out, but rather whether parts of the UK want in!

With Britain out, will Malta succumb to the EU’s renewed attempts to introduce tax harmonisation and regularisation of financial services?

I honestly hope and believe that the Maltese Government will continue to defend Malta’s interests as far as tax harmonisation and regularisation of financial services are concerned. In this, the Prime Minister would do well to take up Simon Busuttil’s offer of cooperation in this and in other matters. National interest demands that both sides come together to defend what keeps us able to compete in a globalised world. Our economy, our jobs, the future of our younger generation depend on this. This was a red line in my time. I trust nothing has happened to change this.

Can Malta benefit economically from Brexit, such as by attracting financial services, iGaming etc?

There are always advantages and disadvantages. Both will probably balance each other out. As I have already stated, for us Maltese, we need Britain to remain a strong and successful economic partner with whom we will cooperate as trading partners and as active members of the Commonwealth of Nations.

Could the negative effects be mitigated through bi-lateral agreements between Malta and the UK? 

Yes of course. And this is something that should not be difficult for us to implement since we already have a number of such bilateral agreements that benefit both sides and which can and should be strengthened now that the UK will no longer be a member of the EU.