I have already written about this in one of my opinion pieces back in 2025. My point in revisiting it is not to argue against NATO’s work. Au contraire, NATO can do what it feels is best in the interest of transatlantic and European security, which we are part of in any case under the EU-NATO Cooperation, and which we contribute to that forum. However, my central point is Malta’s neutrality clause and the PL’s longstanding commitment, which remain distinct from NATO’s work. These are rooted in the PL’s supporters’ mindset and the Labour Party’s grassroots, passed down through generations by Dom Mintoff, and in a shared view held by the majority of Maltese people.

Malta has been invited to the NATO Parliamentary Assembly since May 2024. This is not NATO membership, nor does it affect Malta’s constitutional neutrality. The NATO PA is a parliamentary forum, not a military structure. Neutral countries, including Austria and Switzerland, participate to understand security developments, contribute their views to democratic oversight, and engage in Euro-Atlantic dialogue without joining NATO. We already had a similar set-up through the Political and Security Committee of the EU and the North Atlantic Council. When I was posted in Brussels, we often met with ambassadors from the Political and Security Committee of the EU, of which I was Malta’s representative under the Lisbon Treaty, and the North Atlantic Council. These meetings took place four times a year, and we were informed about security developments because the Political and Security Committee of the EU works closely with NATO on different programmes of interest to avoid replicating missions and initiatives. This is why the EU and NATO meet almost every two years to negotiate areas of cooperation.

I always said that the Political and Security Committee of the EU is an important committee that must be given due attention. Frankly, in the past, we used our relationship in Brussels to understand what is happening from a security point of view. Well, the reasons why I left my post in Brussels were twofold. Firstly, I wanted to retrain as an economist specialising in ESG risk within the banking and financial industry, and secondly, it is better left unsaid. Certainly, I did not know that I would end up in politics, with a campaign for the MEP elections in 2024, and another for the general election, the last one being successful in both the second and ninth districts with a casual election. Now that I have been sworn in as a Member of Parliament with the PL, we are offered roles on the backbench, including standing committees chairing, membership, or head of delegations.

The government needs to appoint different heads of delegation, including that of NATO. Notwithstanding that I have ample experience in this area, and security was part of my work in the past, I was always on the side of the EU’s Political and Security Committee, distinct from NATO’s structures. Hence, I conveyed my disinterest in the latter. Certainly, I appreciated the nomination to become a member of the Economic and Financial Standing Committee, as well as a member of the Information Technology and Artificial Intelligence Affairs Standing Committee. The reason I appreciated these committees is that I shied away from the topic of security and defence in the past years, as stated in a recent interview. Technically, the topic of security and defence is essentially controversial unless you bow to certain debatable requests.

Indeed, I will focus my expertise as a member of the Economic and Financial Standing Committee and continue writing and sharing my ideas on aspects relating to the economy, sustainability (ESG) and now also Artificial Intelligence and information technology. And if they need my expertise on the Sustainability Standing Committee, I am happy to help, too. To conclude, the clip of Dom Mintoff with Dan Rather gathered over 120,000 views on my social media in less than four days. This shows that Dom Mintoff and the NATO topic remain highly relevant, as many people still agree with Mintoff’s views 50 years later, in 2026. And frankly, hailing from Bormla, Dom Mintoff remains my idol politician!

The post 50 years later, Dom Mintoff’s political discourse remains relevant! first appeared on The Malta Business Weekly.

While the proposal stems from a genuine desire to alleviate immediate financial stress, tweaking the frequency or formula of the mechanism misses the root cause of the problem. Without addressing the underlying economic engine, altering COLA is merely treating a symptom rather than curing the disease.

Under the current framework, Malta’s COLA calculation is strictly tied to the Retail Price Index (RPI), which measures monthly changes in the cost of a fixed basket of consumer goods and services. The core issue with revising the COLA calculation to include a wider or updated array of modern expenses is that the RPI itself cannot simply be modified by decree.

Because the RPI framework dictates automatic wage adjustments across the entire economy, any structural update to its composition requires explicit agreement among all social partners – unions, employer bodies, and the government by achieving a consensus at the Malta Council for Economic and Social Development (MCESD).

Most importantly, whether COLA is increased, rewritten, or paid out bi-annually instead of annually, it will not effectively solve the purchasing power issues faced by low-wage earners.

COLA is fundamentally a reactive mechanism. It does not create new wealth; it merely tries to catch up with wealth that has already been eroded by inflation. Delivering this adjustment every six months might offer a brief psychological reprieve, but it does nothing to alter the baseline economic reality for a low-income household. A worker receiving a top-up twice a year remains trapped in the same low-value economic tier. The absolute value of their money remains low because the value of the labour they are providing hasn’t changed.

Increasing COLA or amplifying its payment frequency without an equivalent rise in productivity is economic tail-chasing.

When wages are legally mandated to rise without businesses generating more output or higher value, the immediate consequence is a spike in operational wage costs. To survive and maintain margins, businesses – particularly in low-margin sectors like retail, hospitality, and basic manufacturing – are forced to pass these costs directly onto the consumer.

The result is a classic wage-price spiral:

• Wages go up to match high prices;
• Increased wage costs force businesses to raise prices further;
• The worker returns to square one, needing another COLA increase because the previous one was swallowed by the new wave of inflation.

Ultimately, the tail is never caught, and the purchasing power never truly improves, while Malta’s international competitiveness slides downwards.

The only sustainable way to break this cycle and genuinely uplift low-wage earners is to transition from a quantity-driven economy to a quality- and value-driven economic growth model. The real solution lies in a much-needed increase in national labour productivity.

Rather than focusing on how to slice a stagnant economic pie more frequently, policy focus must shift toward aggressive investments in digitalisation and automation. By incentivising businesses to adopt advanced technologies, firms can produce higher-value outputs with greater efficiency. Crucially, these capital investments must be intrinsically linked to targeted upskilling programmes for the workforce. This is why it is so important to accelerate the rollout of additional attractive incentives that encourage businesses to expand their use of digital incentives.

When low-wage earners are trained to operate digital tools, manage automated systems, or pivot into high-value service roles, their productivity naturally increases. Businesses can then afford to pay substantially higher basic wages – not because they are legally forced to by an inflationary index, but because the worker is generating genuine, competitive value.

Malta cannot index its way to prosperity. True economic mobility for the country’s most vulnerable workers will not come from a bi-annual COLA mandated wage increase, but from an economy that empowers them to earn more through higher skills, better technology, and elevated labour productivity.

The post Tweaking COLA won’t fix purchasing power first appeared on The Malta Business Weekly.

This is my first summer in Malta, and the naysayers were right.

I was warned it gets hot. I didn’t quite realise how hot, and how intense the Maltese sun can be. And there has been little respite this year, with most of Europe having spent the last few weeks trapped under the same enduring heatwave, so even the usual escape routes north have offered little relief.

Just last week, July’s heat record was shattered, according to the Times of Malta, with the country experiencing its hottest July day on record with temperatures soaring to a sizzling 43.3°C. Walk through Valletta, Sliema or any Maltese town on a summer’s day and the reason is clear: the stunning limestone buildings sadly offer little shade, instead absorbing solar energy all day and releasing it slowly through the night, along with the concrete pavements and asphalt roads.

Malta is already the EU country worst placed to escape the heat. In a recent Eurobarometer survey, just 22% of Maltese people reported living within a five-minute walk of a green space, against an EU average of 50% – worse than every member state bar Romania. A follow-up survey found that only 51% said access to a green space was easy, compared with close to 100% in Denmark, Slovenia, Finland and Sweden. Perhaps an unfair comparison, as those countries do not have Mediterranean climates, but Malta’s summer heat is also compounded by having the lowest forest cover of any EU country, at just 4.3%.

Malta can’t control the climate, but it can control how it responds to it. The data indicates that it has more room to improve shade and access to green space than almost anywhere else in Europe – which also means more room to gain.

Green infrastructure is infrastructure

When we think about investment in infrastructure, we naturally think of roads, hospitals, schools and housing. But trees, parks and green spaces should belong on that list too. With temperatures rising across Europe, the case is no longer just an aesthetic one.

Studies across cities including Washington DC, Athens and Singapore, consistently find that increasing tree-canopy cover can measurably lower both air and surface temperatures. Air-temperature reductions are often in the region of 1–2°C, while pedestrian comfort may improve considerably more, since direct shade beneath a tree can substantially reduce the heat experienced by passersby. For a country like Malta, whose narrow streets already trap heat overnight, that difference is not marginal – it can determine whether the evening passiggata happens at all.

The health stakes are real too. More than 10,000 excess deaths have already been attributed to this year’s early heatwave in Europe with the vast majority aged over 65. Another study estimated that nearly 40% of deaths attributed to urban heat across Europe in 2015 could have been prevented had cities increased their tree cover to 30% of land area. Although forest cover and urban tree-canopy cover are not directly comparable, Malta’s 4.3% forest cover underlines the scale of its greening challenge and its opportunity.

Building on what already exists

Reassuringly, the conversation about making Malta greener has already begun. Project Green (projectgreen.mt) is creating and upgrading accessible and inclusive public parks and recreational spaces, and is striving to improve the quality of life for the people of Malta and Gozo. Its aim is to create eco friendly spaces a short walk from residents’ homes. These steps are hugely important, but Malta lacks one single, measurable national target around which to organise its efforts.

So, what if Malta adopted one – along the lines of: “By 2040, each Maltese and Gozitan resident should live within a five-minute walk of a shaded green space.”

Given that only 22% currently do, this is an ambitious but honest target – one that would give Project Green, local councils, and private property developers a shared metric to work towards, rather than merely a general direction of travel.

Thinking small to achieve something big

Malta does not have the space for large new parks, but it does have room for smaller interventions: pocket parks in unused corners, tree-lined pedestrian routes, green schoolyards, planted public squares instead of additional paving, and green roofs or living walls as standard features of new developments.

Species choice matters too. Malta’s native and Mediterranean trees – carob, olive, Aleppo pine, cypress and strawberry tree – are drought-tolerant once established, so greening towns need not place heavy long-term demands on the island’s water supply.

A business case, not just an environmental one

This is what may matter most to business readers.

Energy costs Research on US cities found that peak electricity demand rises by 2-4% for every 1°C increase in daily maximum temperature above a 15-20°C threshold, driven largely by air-conditioning load. Trees can help reduce this by cooling the ambient air and, more significantly, by shading buildings directly, cutting the demand for air-conditioning in the first place.

Property values This is one of the best-evidenced green-infrastructure effects globally. Studies have found that proximity to green space can add a significant premium to property prices. Even conservatively, a national shading target could also be considered a national property-value programme.

Footfall and retail Shaded, walkable streets keep shoppers outdoors for longer and encourage repeat visits, a pattern documented in several European high-street greening projects. To my knowledge Malta does not yet have a published local footfall study to cite. I believe the data exists so it may be worth publishing before the next round of streetscape investment, so the claim can be tested, rather than assumed.

Talent and tourism Malta already markets its climate and lifestyle to remote workers and international firms. A country that is visibly and measurably adapting to Mediterranean heat – rather than simply enduring it – makes a stronger pitch than one that is not.

None of this is to suggest that greening pays for itself instantly. What I hope to demonstrate is that green infrastructure can behave economically in much the same way as other infrastructure projects: an upfront cost with a quantifiable, compounding return.

A piece of a bigger puzzle

Importantly, this proposal needs not sit outside Malta’s national climate strategy. Instead, it supports one of its weakest areas.

The EU’s 2040 climate target commits member states to a 90% net reduction in greenhouse-gas emissions (relative to 1990 emissions) on the way to full climate neutrality by 2050. Malta’s own National Energy and Climate Plan sets a comparatively modest renewable energy target of 24.5% by 2030 – well below the EU-wide collective 42.5% goal. The plan itself attributes this gap to the island’s lack of space for solar and wind farms and the absence of rivers for hydropower.

Malta can’t simply generate its way out of this problem as larger member states can. With limited land for renewables, and cooling accounting for a growing share of energy use, reducing demand is especially important. Malta’s climate plan already recognises the need to cut heating and cooling demand, with the country recording the EU’s largest year-on-year increase in renewable heating and cooling in 2024, making Malta the fastest growing EU nation for green climate control over that year. A national shading target would therefore complement – not compete with – the existing energy strategy: reducing air-conditioning demand without placing further pressure on scarce land or water.

A concrete proposal (if you forgive the pun)

Malta already has many of the requisite building blocks in place: Project Green, cross-party interest, and community pressure. What is missing is a single national measure tying these efforts together, supported by incentives for incorporating greenery into new property and infrastructure developments. A five-minute shaded-green-space target could be embedded in planning policy, tracked by local councils and reported on annually, like any other infrastructure commitment.

Young trees planted this year will provide their greatest benefit not to us, but to generations to come. Malta has repeatedly shown that it can adapt and outperform its size. Measuring national progress by how much shade and green space we create, alongside how many roads and properties we build, would be a fitting next step – and, on the numbers above, a genuinely profitable and healthy one.

Beyond the economic case, proximity to nature is associated with lower stress, cleaner air and greater opportunities for summer exercise. Trees provide shade while helping to capture dust and pollutants. The benefits are environmental, economic, and profoundly human. What’s not to like?

Maria Darby-Walker is a non-executive director; Visiting Fellow, Oxford University and Business adviser / mentor

The post A five-minute walk to shade: Malta’s missing climate target first appeared on The Malta Business Weekly.

Disastrous local and regional election results in May heaped further pressure on Starmer, which became impossible to withstand after Burnham won a parliamentary by-election on 18 June, allowing him to run for leader. Burnham, regularly seen in his trademark dark T-shirt and casual jacket, has secured the backing of 379 of Labour’s 403 MPs, with no one mustering the 81 nominations required to challenge him.

But he will face the same unenviable challenges that beset Starmer, namely a tepid economy, high government borrowing costs, and irregular migrants arriving in small boats. The crucial reason Sir Keir has left office is that he lost the confidence of his own MPs. The enormous majority he won in the 2024 general election was largely squandered: his attempts to force through contentious policies, such as cuts to benefits, through coercion rather than persuasion resulted in embarrassing climbdowns.

Not to forget, Starmer faced unpredictable energy prices due to the US-Iran war and a volatile American president in Donald Trump. Being a strong doer, Andy openly argues that Britain needs a new economic model, not just tweaks. By contrast, Sir Keir squandered the political capital he had at astonishing speed with a series of U-turns and reinventions that voters hated.

Starmer returned Labour to power after 14 years in opposition in July 2024 with a landslide victory over the Conservatives, who had churned through five prime ministers in the tumult unleashed by the 2016 Brexit referendum.

Back to Andy, his most striking decision is not to make Ed Miliband chancellor but instead to appoint him foreign secretary. Can a stagnant economy now raise its head above the parapet and witness a shift toward devolution and a new economic model, following a 10-year national renewal plan aimed at ending a decade of instability? Britain (like Malta) certainly needs a “circuit breaker” moment, resulting in the biggest changes in 40 years.

Miliband, as foreign secretary, is seen in Brussels as more open to deeper EU alignment than Starmer, though not to rejoining. By contrast, Andy represents a shift from managerialism to transformation, from centralisation to devolution, and from caution to long-term structural change.

His popularity might be equally short-lived; however, the data suggest that the new Labour leader could build a more enduring electoral base by uniting Britain’s fragmented centre-left voters.

Later this week, he is expected to change the government’s stance on oil and gas exploitation, with a new energy secretary in place. As expected, Andy also promised to do something about the cost of living, with more detail on the “breathing space” he is offering hard-pressed families. By extending Manchester’s £2 bus fare cap, this would be a tangible step, different from the £3 cap under Starmer and Chancellor Rachel Reeves.

With energy prices rising again, there may be action to support commuters facing higher energy costs. Andy is lovingly nicknamed the “King of the North” for winning three successive elections to the Greater Manchester mayoralty, and his flagship idea is devolving powers to other cities to fire up Britain’s economy, including setting up a “Number 10 North” office.

One cannot underestimate his drive for change. In fact, he is reported as saying, “…if we want an economy and a country that works for all people and places… then it requires a new path to the one we’ve been on for the last 40 years”.

But such a monumental task requires boosting the construction of public housing and trying to resolve the homelessness crisis by pumping adequate resources into social care. Other spectacular changes include a new 10-year plan for Britain – to be unveiled later this year – and building a new economy, putting “life’s essentials back under public control”.

But he argues that people need “breathing space now”. Most feel that solutions need to be found to tackle the cost of living.

Other changes he promised included changing the education system to help young people into work, building more council homes, and honouring commitments to fund defence while sticking to the UK’s spending and debt rules.

One of Burnham’s poignant tasks is to instruct Whitehall officials on what to do if the country comes under nuclear attack and the government is incapacitated. That is one reason for the resignation last month of John Healey, the defence secretary, who thought the proposed defence investment plan was inadequate to meet the threats and the loose commitment to spend 3.5% of GDP on defence by 2035.

Finally, let us wish Burnham success as he embarks on the challenging journey of restoring stability and prosperity to his country’s struggling economy.

The post Needed: A fundamental transformation in Labour politics first appeared on The Malta Business Weekly.

The Commission published its review of the EU ETS on 17 July, proposing a number of changes aimed at reducing carbon emissions while addressing concerns raised by the shipping industry over the impact of the scheme on European ports.

MMF Chairman Godwin Xerri said the proposed amendments acknowledge several of the concerns raised by the sector but argued that additional changes will be necessary to ensure the EU’s decarbonisation objectives do not come at the expense of Europe’s maritime competitiveness.

Among the proposals welcomed by the Forum is a temporary reduction in EU ETS allowance-surrender obligations for certain container cargo transhipped through EU ports, including Malta Freeport. The measure would apply until the end of 2035 for inbound voyages from non-EU ports undertaken by container ships with a capacity exceeding 10,000 TEUs, where cargo is transferred to another vessel destined for a non-EU port.

While the exemption would not apply to Malta’s import and export cargo, the MMF said it would help reduce the competitive disadvantage faced by European transhipment hubs when compared with nearby non-EU ports that are not subject to the same emissions trading rules.

According to the Forum, Malta Freeport has come under increasing competitive pressure from ports in North Africa, particularly in Egypt and Morocco, which have significantly expanded their infrastructure and capacity in recent years. Several shipping services have already shifted operations away from EU ports, resulting in non-EU hubs capturing the majority of new transhipment business.

The Commission has also proposed tightening the rules governing neighbouring non-EU transhipment ports by lowering the transhipment threshold from 65% to 50% and broadening the criteria used to identify ports that could benefit from avoiding EU ETS costs.

However, the MMF said these changes do not fully address the issue, noting that the rules become ineffective whenever vessels bypass EU ports altogether.

“The proposed changes represent positive progress in addressing business and carbon leakage resulting from the implementation of the Directive,” Xerri said. “However, the review process must continue to ensure the legislation protects both Europe’s environmental ambitions and the competitiveness of its maritime sector.”

The Forum is also calling for permanent exemptions for island member states and other geographically disadvantaged regions, arguing that their dependence on maritime transport places them at a structural disadvantage.

Xerri said Malta’s insularity makes reliable maritime connectivity essential for both consumers and businesses, and that this should be permanently recognised within the EU ETS framework.

The MMF further urged the European Commission to clarify what would happen should the International Maritime Organization (IMO) introduce a global carbon pricing mechanism for shipping. The Forum believes the Commission should commit to withdrawing the regional ETS regime if a global measure is adopted, thereby avoiding overlapping compliance obligations and additional costs for shipping operators.

The Forum also welcomed proposals to earmark EU ETS revenues for the shipping sector through both national funding and the planned Maritime Transport Decarbonisation Fund.

However, it argued that financial support should extend beyond wind-assisted propulsion and shore-side electricity to include a broader range of technologies capable of improving energy efficiency and reducing emissions across all shipping segments, including short-sea, bulk and tramp shipping.

The MMF said it remains committed to working with the Maltese government, European institutions and industry stakeholders to pursue further reforms to the EU ETS Maritime framework, particularly those recognising the unique challenges faced by island states that rely heavily on maritime links for their supply chains.

The post MMF welcomes proposed EU ETS changes but says more reforms are needed to protect Malta’s maritime sector first appeared on The Malta Business Weekly.

Organised by IFSP’s Directors Chapter, IDC Malta, the workshop focused on Strategy and Value Creation, bringing together directors, senior executives and financial services practitioners for a practical discussion on boardroom effectiveness, strategic decision-making and sustainable value creation.

The session forms part of the Boardroom Excellence Workshop Series, a five-part programme designed to elevate governance standards and strengthen boardroom performance in an increasingly complex regulatory and business environment.

Speaking during the workshop, Kenneth Farrugia, Chief Executive Officer at Bank of Valletta, highlighted governance as a strategic capability, particularly in financial services, where trust, accountability and long-term resilience remain central to institutional credibility.

“Strong governance is one of the foundations on which trust in financial services is built,” said Mr Farrugia. “It goes beyond structures, policies and reporting lines. It is reflected in the quality of decisions, the clarity of accountability, and the ability of institutions to create sustainable value while managing risk responsibly.”

Mr Farrugia noted that the sector is being shaped by heightened regulatory expectations, technological change, evolving customer needs and increasing stakeholder scrutiny. In this context, he said, boards and senior leaders must continue to strengthen their judgement, oversight and ability to balance opportunity with responsibility.

“Our collaboration with IFSP reflects BOV’s commitment to supporting the continued development of Malta’s financial services sector,” Mr Farrugia added. “As Malta’s largest financial institution, we have a responsibility to contribute to initiatives that promote professional development, thought leadership and stronger governance capability across the industry.”

The workshop reflects the broader objectives of the strategic agreement between BOV and IFSP, centred on knowledge sharing, professional development and joint initiatives that support Malta’s financial services professionals and organisations.

Through this collaboration, BOV and IFSP are creating practical opportunities for dialogue, learning and engagement on issues shaping the future of the sector, including governance, regulatory readiness, innovation, leadership and long-term competitiveness.

Commenting on the collaboration, Mr Nick Captur, President of IFSP, said: “The relationship between IFSP and BOV reflects the importance of collaboration between professional bodies and leading market institutions. Through the Directors Chapter and the Boardroom Excellence series, we are creating opportunities for directors and senior professionals to engage with governance in a practical, relevant and forward-looking way.”

The Boardroom Excellence Workshop Series combines expert insight, practical case studies and boardroom simulations to support current and aspiring directors and senior executives in strengthening their understanding of board responsibilities and leadership-level decision-making.

BOV and IFSP reaffirmed that continued investment in governance capability, professional standards and sector-wide dialogue remains essential to Malta’s long-term competitiveness as a financial services jurisdiction. Their collaboration will continue to support responsible leadership, regulatory awareness and sustainable value creation.

The post IFSP and BOV strengthen governance dialogue through Boardroom Excellence workshop first appeared on The Malta Business Weekly.

The latest figures show that foreign residents now make up 31% of Malta’s population, with net migration patterns continuing to drive growth. Based on PwC’s demographic modelling, Malta’s population is projected to reach a base case of 636,000 by 2030.

This path puts the country among Europe’s fastest-growing economies by population.

This rapid expansion brings both economic opportunity and important challenges. At its current population level, Malta already ranks as the fourth most densely populated country globally, with a population density of approximately 1,862 people per square kilometre. By 2030, this density is projected to increase to 2,013 people per square kilometre, which will add further pressure on the nation’s finite resources. 

Infrastructure demands require urgent investment

The report highlights clear infrastructure pressures that call for decisive action. Currently, Malta ranks 17th among EU peers on hospital beds per 100,000 residents, with 397 beds compared to the EU average of 511. To simply maintain this relative standing by 2030, Malta would need to add approximately 329 additional hospital beds, meaning a 15% increase. To reach parity with the European average Malta would require nearly 1,054 additional beds, a 48% increase.

Energy infrastructure is also worth considering, given the increasing population. According to the latest data, Malta produced 2,138k MWh of locally generated electricity in 2024, with a net 970k MWh imported to meet total energy demand. Assuming the same level of local energy capacity for a projected population of 636,000, Malta would need to import 1,304k MWh of electricity to maintain current per capita consumption levels, representing a circa 25% increase in imported energy requirement.

While the demographic path presents challenges, it also underscores the urgency of strategic planning. Our projections are based on varying levels of slowdown in current net migration flows. Nonetheless, population is still expected to increase significantly, with the mix of foreign to local residents potentially reaching around 38% by 2030. The key policy change will be ensuring that infrastructure, public services, and long-term planning keep pace with this changing reality.

“Malta’s population growth reflects our economy’s resilience and attractiveness, but it demands proactive planning,” said Lucienne Pace Ross, PwC Malta’s Territory Senior Partner. “The decisions we make today regarding infrastructure investment and resource allocation will fundamentally determine whether this growth improves our quality of life or strains our public systems. We must make sure that our hospitals, energy networks, and essential services scale proportionally with population expansion.”

The full PwC Economic Update offers a detailed update of Malta’s economic performance and sets out demographic projections. To access the complete report and explore detailed insights into Malta’s economic outlook, visit here.

The post Population growth drives urgent infrastructure needs – PwC Malta Summer 2026 Economic Update first appeared on The Malta Business Weekly.

However, while welcoming several of the amendments it had advocated, the Malta Business Bureau cautioned that the reform still falls short of adequately protecting island member states from the disproportionate costs of decarbonisation.

This introduction captures the contrast between the two statements from the outset: the government’s emphasis on success and the MBB’s more measured assessment, setting up the story to present both perspectives.

The government said it is satisfied that the European Commission’s revised Emissions Trading System (ETS) proposal incorporates a number of key Maltese priorities, including stronger protection for Malta Freeport, continued safeguards for the country’s air connectivity and the retention of dedicated support for island Member States.

The proposal for the revision reflects several recommendations consistently advanced by the Government throughout the past years following the entry into force of the current system, which recognise the unique realities faced by island states whose economies depend heavily on maritime and air transport.

The ETS is the European Union’s carbon pricing mechanism, which places a cost on emissions from shipping, aviation and other sectors. While the system is designed to drive down carbon emissions across Europe, its implementation must also ensure that island Member States are not placed at a structural disadvantage simply because of their geography.

These results are the outcome of sustained engagement by the government at European level, backed by continuous consultation with Malta’s private sector, the government statement said. “Government worked closely with businesses, industry representatives and operators to understand the practical realities they face and ensure Malta’s position was firmly grounded in evidence, practical experience and economic realities.”

As a result of these efforts, Malta positively notes that a number of important improvements to the current system are being put forward by the Commission.

Under the proposed revision, transhipment operations involving cargo arriving from non-EU ports and not destined for the European Union will no longer be subject to ETS charges. This is a significant achievement for Malta Freeport, safeguarding its competitiveness against rival transhipment hubs outside the European Union.

The Neighbouring Port clause has also been extended to cover all competing North African ports. This closes a loophole that previously incentivised shipping operators to make an intermediate stop outside the European Union purely to reduce their ETS costs before entering EU ports.

The government said it also welcomes the proposed retention of a dedicated allocation of ETS revenues for Malta, Cyprus and Greece until 2038.

In aviation, the temporary suspension of full ETS charges on departing flights has been maintained until 2032, helping safeguard Malta’s connectivity while limiting additional costs for airlines, businesses and passengers.

Minister for Energy, the Environment and the Regeneration of the Grand Harbour Miriam Dalli welcomed the revised proposal, describing it as proof that Malta can achieve meaningful results when it combines ambitious climate objectives with a strong defence of the national interest. “Climate action must be fair. Island states cannot be expected to carry disproportionate costs simply because of their geography. Throughout its active engagement with the European Commission ahead of this proposal, Malta consistently made the case that Europe’s climate ambitions must go hand in hand with competitiveness, connectivity and fairness. I am pleased that Malta’s realities are reflected in this revision, delivering tangible improvements that safeguard the competitiveness of our strategic maritime and aviation sectors.”

“We look forward to the negotiations in the Council where Government will continue working constructively to deliver further targeted support to our businesses and citizens. Our commitment to climate action is unwavering, but the transition must also be practical, equitable and leave no island state behind,” Minister Dalli stated.

For its part, the Malta Business Bureau (MBB) called for the re-design of EU ETS to deliver for all Member States, especially those in the periphery.

MBB said it has proposed concrete amendments to prevent disproportionate harm to Malta and other island Member States. In line with MBB amendments, the Commission has proposed a reduction in the transhipment activity threshold from 65% to 50% providing relief for Maltese transhipment against North African ports. The review was tasked by European Council conclusions of 19 March 2026, with reducing the volatility of the carbon price and mitigating its impact on supply chain costs, while preserving the ETS’s role in the climate transition.

It nonetheless falls short of proposing tangible measures which will reduce costs for maritime and aviation operators. MBB’s CEO Mario Xuereb said: “. MBB supports ambitious decarbonisation, but the structural realities of island states, higher transport and energy costs, limited economies of scale, and import dependence, must be reflected in the design of the EU ETS. Without targeted safeguards, the reform risks overburdening Malta with the costs of decarbonisation, without reaping any of the benefits.”

Malta, as an island Member State with no land connection to the rest of the Single Market, depends entirely on maritime and air links for the movement of goods and people. The MBB has repeatedly flagged that vessels carrying the majority of goods consumed in Malta return to the mainland more than half empty, meaning the full ETS cost is absorbed disproportionately across the round trip.

Decarbonisation measures in both sectors are far from being feasible to be implemented, and until then, Malta will be left to foot the bill. MBB has submitted concrete textual amendments to the Commission, including partial derogation from the maritime ETS surrender obligation for routes serving small islands with no fixed link to the mainland, and an equivalent free allocation for aviation to and from island airports of less than 10,000 km².

MBB said it had also proposed extending the definition of a “neighbouring container transhipment port” from 300 to 1,000 nautical miles, alongside lowering the threshold from 65% to 50%, which was accepted. While the Commission did not extend the radius itself, it introduced a further anti-evasion safeguard: any port within 150 nautical miles of an EU port with adequate transhipment infrastructure, will now qualify as a “neighbouring transhipment port” regardless of its transhipment share.

MBB welcomed this additional layer of protection against the relocation of transhipment activity to nearby non-EU ports. MBB’s Brussels-based Nigel Caruana said: “This ETS review is the first real test of the Commission’s commitment to tailor policies to island realities. The measures MBB has proposed would mitigate the impact on essential connectivity while preserving the environmental integrity of the system.” The European Commission published its EU ETS reform proposal on 17 July 2026.

The reform, the first legislative proposal shaping the post-2030 climate architecture, adjusts the Linear Reduction Factor, phases out free allowances, strengthens the Market Stability Reserve, and considers extending the system to waste and extra-EU/EEA flights. It also addresses revenue use and the potential inclusion of carbon removals and international credits. The EU ETS was extended to maritime transport from 2024 and reached full compliance from January 2026, with shipping companies now required to surrender allowances for 100% of verified emissions on qualifying voyages. Aviation allowances moved to full auctioning from 2026, following the phase-out of free allocation.

Malta, as one of three island Member States alongside Ireland and Cyprus, faces structural economic constraints recognised explicitly in Article 174 of the Treaty on the Functioning of the European Union (TFEU), which identifies islands among regions “suffering from severe and permanent natural or demographic handicaps.”

The Commission’s ETS 2021 Impact Assessment (SWD(2021) 601 final) recognised that extra-EU imports and exports transported by sea account for over 50% of the total value of traded goods for island countries such as Malta, Cyprus and Greece, and that these countries and regions are among those most exposed to changes in shipping activity resulting from the ETS. Transport costs can exceed mainland benchmarks by up to 300%, and geographic isolation imposes GDP per capita costs estimated between 7% and 36%.

BusinessEurope and several Member States have highlighted competitiveness concerns, while others have called for greater ambition. The MBB, marking its 30th anniversary this year, said it will continue to advocate the Maltese government, the EU Commission, MEPs and BusinessEurope counterparts to ensure the final text of the ETS revision take proportionate account of the structural realities faced by island Member States.  

The post Government claims key gains in EU ETS overhaul as business lobby says more must be done first appeared on The Malta Business Weekly.

There’s a popular narrative that the country doesn’t need the real estate sector. It’s not the engine of the economy, but it’s one of its lubricants. We hold our breath and recall salient electoral pledges sung by Labour influencers in the lead-up to the party’s unprecedented fourth consecutive victory. Among the many pledges made were:

• The €1,000 annual “super bonus” for workers (minimum €500 for part-timers); next, more family/parental support, such as extending maternity leave to 26 weeks; introducing six months of government-paid parental leave (shared); additional paid leave for new parents; and a €5,000 birth bonus per child.
• More exciting freebies include extended housing help – the “My First Home” scheme: an interest-free government loan of up to 25% of the property value for first-time buyers. Added to these incentives were a range of youth-focused measures, including a commitment to exempt the first €30,000 of income from tax for three years for young people entering the workforce or starting a business. An even bigger incentive was reserved for pensioners, who were promised a €50 weekly increase over five years, on top of COLA adjustments.
• The Chamber of Commerce applauded promises for their members, such as €250 million for economic shocks; a target of 4% annual GDP growth; keeping the deficit under 3%; and more high-quality jobs. Nothing pleases the sans-culottes more than the promise to freeze construction during appeals; revise local plans; build two Gozo Channel boats; and protect green spaces (for example, Manoel Island and White Rocks as national parks).

Some pledges are expensive or complex (for example, major infrastructure, large pension increases, extensive school modernisations) and may face delivery challenges. The government is likely to prioritise the most visible ones (bonuses, family benefits, first-time buyer help) early on, but full delivery on the broader manifesto will depend on economic conditions and execution – areas where previous Labour governments have shown both strengths and delays.

The Central Bank has taken a bullish stance towards Malta’s economy, revising its GDP growth forecasts upwards and saying overall risks to economic growth in 2026 are tilted to the upside. It expects Malta’s economic growth to be largely fuelled by an increase in domestic demand and a gradual recovery in private investment. Net exports will also contribute to growth, though less than domestic demand.

Inflation risks are also slightly tilted to the upside, the Central Bank said: geopolitical and global trade issues could all create supply-side bottlenecks that fuel inflation; wage pressures could be stronger than expected; and unfavourable weather conditions, as well as some policies supporting the green transition, could also push up inflation.

Growth is projected at 3.7% in 2026, 3.6% in 2027, and around 3.8% in 2028 (Central Bank). The IMF expects Malta to lead Europe with ~4% average annual growth through 2031. All the while, there is a healthy prognosis that we did exceed EU economic targets, with GDP growth reaching 4.9% at constant prices in 2024.

One congratulates Clyde Caruana, Finance Minister, as a dignified economist announcing a generous budget for 2026 which, inter alia, aims to help a low-income stratum of society, nurture young families, and lift up pensioners’ lot in fighting the cost of living. In his budget speech, he stressed that Malta’s economy aims for its next leap forward in terms of quality, to start producing more clean energy by harnessing natural resources like wind and solar power.

Many sustain a common perception that commercial banks are brimming with idle cash yet, as a general rule, give a hard time when approached to lend depositors’ money. This is true, however, as a result of Malta’s FATF grey-listing in 2021; banks had taken a cautionary approach and decreased their risk appetite, particularly in areas where they lacked sufficient knowledge of proposed business lines or activities. Malta’s swift removal from the Grey List in 2022 has since leveraged expectations that banks return to their previous stance and become more approachable.

Moving on, one notes with satisfaction a projected compilation by foreign experts of a Malta Vision 2050. Naturally, no discussion is complete without mentioning the exemplary tourism revival since the two ugly years of the pandemic.

On a sore note, we cannot omit to mention a drawback in our educational system, with only one in five students passing Matsec exams. Realistically, given the millions invested in education, the dismal maintenance of a low scholastic level each year carries deep economic and social implications for Malta’s both present and future AI digital industry.

In summary, many hope that 2026 will augur well for our leaders to stand tall, forget the political divide, and try to boost exports by lifting their heads above the parapet.

The post Middle East burns yet Malta’s prospects are bright first appeared on The Malta Business Weekly.

There was a time when the financial services industry changed slowly. Banks looked like banks. Insurers looked and acted like insurers. Competitors were traditionally familiar names playing by familiar rules.

That world has moved on. A bank or insurer today may find its keenest competitive threat comes not from a traditional rival, but from a technology firm people deal with every day, or from a fintech challenger.

The question facing financial services businesses everywhere is deceptively simple: how do we stay relevant? It’s a question posed in boardrooms the world over – and Malta is no exception.

Financial services have been one of the island’s economic successes. Over three decades it has built an internationally-recognised industry spanning banking, insurance, investment services, wealth management, payments, fintech and professional services – a sector that today accounts for 7% of Malta’s Gross Value Added and around 6% of the country’s workforce, according to recent figures from the Malta Financial Services Authority (MFSA) and industry bodies such as FinanceMalta.

But thriving industries and businesses rarely have the luxury of standing still.

Successful digital challengers such as Revolut have shown how quickly customer expectations shift – accounts opened in minutes, instant payments, simple apps on people’s phones, a more customer-friendly approach – these have reset what people expect from a financial services institution, even as many continue to navigate the challenges that come with rapid growth and increasing regulatory scrutiny.

The lesson isn’t that every bank or insurer should turn itself into a technology company. It’s that every institution needs to properly understand what its customers truly value. Trust and security remain non-negotiable, but customers now also expect services to be fast, simple, and intuitive.

Established firms carry the weight of legacy systems, regulation, and complex operating models. New entrants can move faster but face the harder task of scaling safely and building a customer base, often at vast expense. Success will go to those who strike the balance: innovative yet disciplined, agile but resilient, customer-focused with robust controls.

As a board director in financial services, one of the more striking changes I’ve seen over recent years, is how the risk landscape has grown more complicated. Operational resilience is now a boardroom issue. Businesses depend on technology providers, outsourced partners, cloud infrastructure, and increasingly intricate supply chains – and a problem outside the organisation can quickly become a problem inside it, as we saw with the cyberattack on Jaguar Land Rover in the UK. The Cyber Monitoring Centre estimated that the attack cost the UK economy £1.9 billion (€2.2 billion), describing it as one of the most damaging cyber events in the country’s history; more than 5,000 businesses in JLR’s supply chain were affected, with production halted for weeks and the ripple effects lasting considerably longer.

The relevance for financial services’ companies is clear: today’s risks rarely stay neatly contained within company boundaries or traditional sector definitions. Businesses need a clear picture of not just their own operations, but the wider ecosystem they sit within.

Customer data poses a similar challenge. Financial institutions hold vast quantities of sensitive information. Used well, it improves services, helps prevent fraud, and creates better customer experiences. But systemic weaknesses will be exposed and exploited, damaging, possibly irreparably, the one asset a financial business can’t do without: trust. Reputational harm, regulatory censure, fines, and lost business follow close behind.

One risk gaining ground is “shadow AI”, where employees paste sensitive client data or code into unapproved, publicly available AI tools, creating an immediate and often invisible data leak. Clear AI governance, employee training, and appropriate controls, are now essential parts of good risk management.

This is why good governance matters. The best firms build cultures where innovation is encouraged but challenge is welcomed too – where ambitions for growth are matched by investment in controls, people, and systems.

For Malta, these questions carry weight. Smaller financial centres have real advantages: they can be entrepreneurial, responsive, and closely connected, with regulators, businesses, and policymakers able to work together and respond to issues more easily than in larger markets. But international credibility rests on keeping standards. The MFSA’s 2025 Annual Report, published earlier this month, gives some sense of the scale of supervision now under way: 1,849 supervisory interactions with authorised entities over the year, 1,023 new authorisations approved, and €570,673 in penalties imposed. Consumer protection, sustainability, cyber resilience, and operational efficiency all feature as continuing priorities, alongside developments across banking, insurance, capital markets and crypto-assets, as European and global standards keep evolving. Sustained attention to anti-money laundering, financial crime prevention and effective regulatory oversight will remain essential to that credibility.

The strongest financial centres have come to recognise that effective regulation is not the opposite of competitiveness – it’s part of what makes a jurisdiction attractive.

EU membership is central to Malta’s competitiveness. A single MFSA licence allows a Maltese-based financial company to “passport” its services across the entire EU and EEA market of some 450 million consumers, under frameworks such as MiFID II, Solvency II and PSD2 – and, for crypto-asset firms, the newly harmonised MiCA regime – reducing the need for separate authorisations across individual markets.

But membership cuts both ways. Malta must match the standards of other member states, consistently. Firms are working through the operational requirements of the EU’s Digital Operational Resilience Act (DORA), and crypto businesses face this year’s deadline to convert from Malta’s earlier national licensing regime to full MiCA authorisation. Effective passporting depends on strong trust between regulators, particularly as other EU supervisors rely on Malta’s oversight as well as their own. Moreover, Malta isn’t the only small EU domicile offering this access – Ireland, Luxembourg, Cyprus and Lithuania are competing for much of the same business – so Malta’s advantage will need to be earned through speed, transparency and sustainability, not through the licence alone.

So, what might the next decade look like?

The successful financial services businesses of the future may not simply be those with the greatest scale or the newest technology. They’re more likely to be those with the ability to continually reinvent themselves – organisations that adapt to customers’ needs, use technology intelligently and safely, attract the best talent, and maintain the discipline and resilience on which trust depends.

For Malta, the opportunity is significant. The island has already proved that a small jurisdiction can build a financial services industry with international relevance. The next challenge is moving from growth to sustained excellence.

Financial organisations that succeed won’t be those that choose between innovation and regulation, speed and security, ambition, and responsibility. They’ll be those that understand these qualities must exist together – and that agility only creates lasting value when combined with world-class standards, strong governance, and a relentless focus on good customer outcomes.

MFSA’s CEO, Kenneth Farrugia, recently stated that the authority’s focus remains on “building trust, strengthening resilience and shaping the future of Malta’s financial services industry”.

It’s a fitting ambition – not only for Malta’s regulator, but for every Maltese financial services business preparing for the future.

After three decades of growth, Malta’s financial services industry has earned its place on the international stage. Its next chapter will be defined not by protecting what has already been built, but by having the confidence to challenge it.

Maria Darby-Walker, non-executive director, Visiting Fellow at

Oxford University and Business mentor

The post Beyond growth: The next test for Malta’s financial services industry first appeared on The Malta Business Weekly.