Malta election rhetoric focuses on EU

Date: 10/10/1996

By Mark Turner

WHEN Maltese Prime Minister Dr Edward Fenech-Adami called a general election last month, he was, in many ways, calling a referendum on future EU membership.

For accession to the Union is one of the few issues where

there is clear divergence of views between the two main contenders for office: Fenech-Adami's Nationalist Party is firmly pro-European, while Dr Alfred Sant's Labour Party would rather see Malta loosely involved in the Union, but from the outside.

With just two weeks to go before polling day on 26 October, it remains to be seen who will win the argument, with the two parties running neck and neck as they enter the final straight.

Clearly, not all Labour supporters are specifically anti-EU. In October 1995, a Eurobarometer survey found that nearly two-thirds (63&percent;) of Maltese supported membership, with only 24&percent; against.

But a Labour win would nonetheless send a profound signal to the rest of Europe from a country which is due to start accession negotiations with the EU six months after the current Intergovernmental Conference ends.

Labour argues that Union membership would not be in Malta's interests.

“The rules and regulations in the EU were agreed upon in the interest of current members. If we were to apply them all to a micro-economy like Malta's, the disadvantages would far outweigh the advantages,” insists Labour's deputy leader Dr George Vella. “If we had to buy food at full EU prices, there would be a huge increase in the cost of living. Wages would follow and we would lose our competitive advantage.”

But Nationalist Economic Service Minister Joseph Bonnici rejects this, predicting that Union membership would in fact create more jobs and boost the country's industry.

Bonnici insists that foreign investors need the security that the EU represents, the free market access it offers, and its structural funds.

“Until we obtain membership, we will not attract the kind of investment seen in Ireland and Portugal,” he warns.

Furthermore, the government argues that the country's current prosperity, resulting from an economic growth rate of 6&percent;, has only been achieved by removing import duties, lowering direct taxes and fostering privatisation - policies formulated expressly to prepare for EU accession.

But Labour claims that the cost - a new levy of 15&percent; value added tax on goods and 10&percent; on services - is too high and has pledged to phase it out over six months if it wins the election. This has gone down well with many voters: VAT has been very unpopular amongst Maltese housewives, who saw a marked increase in the price of living in 1995. Recent falls in the number of tourists visiting the island have also been blamed on higher prices.

In addition, the prospect of Union membership has spawned fears that swathes of work-hungry immigrants would enter the country, stealing Maltese jobs. Trade unions, in particular, are warning against any move which could jeopardise the island's tiny 3&percent; unemployment rate.

Joseph Darmanin, the president of Malta's chamber of commerce, replies that the real danger is a lack of suitable workers.

“We only have an active workforce of 160,000 people - we have a problem with finding labour. We feel that as we are already integrated economically in the EU, to the tune of 75&percent; of all imports and exports, we should go the whole way,” he argues.

Yet going the whole way is one of the deepest concerns of those opposed to Union membership.

The Maltese feel very strongly about their sovereignty and fear that, as a small nation in a large bloc, they would struggle to make their voice heard.

Vella would far rather conclude an industrial free trade agreement with the EU along the lines of External Relations Commissioner Manuel Marín's Euro-Med proposals, in partnership with other Mediterranean states, than be absorbed into the Union.

“The moment we become attached to the EU, we might be perceived as belonging to 'the other side',” he warns.

But Foreign Minister Guido De Marco retorts: “He is missing the whole point. The issue is either being in the Union with a full say, or being second class citizens on the outside. It is a question of what type of Europeans the Maltese want to be.”

Not to join, says Fenech-Adami, “would simply be a disaster”. He adds: “In six months we would be facing high unemployment and high prices.”

But some commentators are not convinced that these apparently clear-cut positions are all they seem.

In the end, they suggest, there is bound to be a softening of posistions on both sides. Labour could well tone down its anti-EU stance if it feels in the future that “the conditions are right”, and the current government has already promised certain concessions on the VAT issue.

There is a chance, therefore, that Malta will eventually join the Union whatever the outcome of the election. The key question would then be 'how soon?'