Maltese poll victory may reactivate accession bid

Date: 23/07/1998

By Mark Turner

MALTA will relaunch its EU membership application if Edward Fenech Adami's Nationalist Party wins the island's widely expected general elections in September or early October.

“We would reactivate our membership bid immediately,” former Foreign Minister Guido de Marco told European Voice, adding: “Our chances of winning are very good. We start from a base of 48&percent; in the last elections.”

Although Prime Minister Alfred Sant has yet to set a date, the ruling Labour Party this month gave massive backing to the idea of holding a poll three years early.

The government argued that its majority of one in the Maltese parliament made the country impossible to run, especially since old Labour stalwart Dom Mintoff torpedoed a key vote on economic development earlier this month.

While De Marco's confidence in a Nationalist victory is not shared universally, the possibility of a sea change in Malta's EU policy is making life somewhat complicated for European Commission officials.

They are currently drafting detailed proposals for a free trade agreement with the island, which Sant called for after freezing his island's accession bid in 1996.

Following a trade mission last June, both sides claim that early disagreements on industrial restructuring and excise duties have been settled and expect negotiations to begin next year.

“We expect the Council of Ministers to approve a negotiating mandate by the end of this year, leading to discussions in 1999,” said Malta's EU ambassador Victor Camilleri.

The two sides appeared to clash this year when the Commission demanded that Malta scrap a new and discriminatory customs and excise tax (introduced so that Labour could end the highly unpopular value added tax) within three years of an accord.

Valetta, on the other hand, demanded between five and seven years in order to complete an industrial restructuring programme.

But both parties now agree that the two proposals cover the same period in practice, as the five-year clock is already running, and an accord is unlikely to be agreed before the year 2000. The two dates for liberalisation would therefore converge in 2003.

But if former Prime Minister Adami wins, much of the last six month's progress could be undone.

A full bid for EU membership would mean going back to the drawing board, and also making some painful decisions about where Malta should stand in the accession queue.

Commission officials are keen to play down such speculation.

“We are following events very closely, but it's business as usual for the time being,” said one.

Within Malta, the EU debate rages on. While few expect the issue to dominate the next elections, the island's relationship with Europe continues to inspire high emotions and splits the Maltese down the middle.

Business leaders claim they want membership, and yet welcome the protection they enjoy under Sant's government. Most Maltese young people like the idea of joining - which would give them access to cheaper education and training opportunities - but they fear that accession could increase unemployment.

In the absence of any conclusive analyses, most discussions come down to emotion rather than logic.

It is almost certainly too early to tell whether Sant's less enthusiastic EU policy has made any significant difference to the island's economy. Malta's economic performance has been unimpressive of late (growth in 1997 was modest at 1.6&percent;), but that may be the result of long-term cyclical factors. The verdict on investment is similarly open.

In practice, most agree that Sant's economic policy has been far closer to the Nationalists' than many expected, making its impact even harder to judge.

Even the European Parliament's rapporteur on Malta, German People's Party MEP Maren Günther, who strongly supports accession, admits that the difference in approach is probably not all that huge.

“Gradual rapprochement with the EU by means of a free trade area followed by a customs union is a realistic approach that is in the interest of both sides,” she said.