For example, during my teenage years, I befriended someone from San Ġwann and became familiar with much of the Mensija area. I continue to spend Saturday mornings in San Ġwann, where I have established relationships with several residents while running errands. Swieqi is another locality where I have spent considerable time with close friends, fostering an attachment to the area. Għarghur, where Ray’s maternal family originates, holds particular significance for me, evoking memories of Auntie Vitor and Ray’s mother, Żarena. Choosing another district proved challenging, as I felt it would be unfair to run in a district alongside colleagues I had recently supported. So, it was natural to choose the ninth district.

After more than three weeks of campaigning, I have observed that the second and ninth districts require distinct policy approaches. The second district faces urgent social housing challenges, particularly regarding the timely completion of units in Hanover (Bormla). Over the past four years, I have advocated for the prompt delivery of these units. The PL’s manifesto addresses affordable housing within the current economic context, an issue I am deeply committed to and have consistently campaigned for. As someone hailing from the second district, I am acutely aware of the community’s needs. Many residents seek little more than secure shelter and the opportunity to improve their lives. Some face insufficient income to maintain a decent standard of living or are excluded from qualifying for social housing. I recognise that social housing should not be a permanent entitlement. Individuals who experience improved circumstances should be provided with a transition period and, if appropriate, transition to affordable housing options. Addressing these issues is essential in the short- to medium-term.

Conversely, the ninth district requires targeted economic and environmental policies. In Swieqi, for example, residents struggle to open their windows during summer due to bitumen production coming from distant but yet close zones, which negatively affects their air quality, and the quality of life. I have engaged with residents who contacted me through social media and email, and I fully support their concerns. It is imperative that authorities intervene to ensure collective interests are protected over private gains. This is not a topic I am speaking about now. I have been advocating for better environmental management, and social matters for more than four years.

In Swatar, the community awaits a decision on a significant development project originating from the 2006 rationalisation under a PN government. The transformation of ODZ land in this valley raises concerns, particularly regarding the inclusion of a sufficient green buffer space. While private land development is understood, proportionality must guide such decisions to safeguard residents’ quality of life. On the other hand, in Pietà, increased traffic and problematic traffic lights in Msida and other areas exacerbate congestion. It is essential that residents are consulted before implementing pedestrian projects. This is what I believe, and compromises must be the norm not the exception.

Certainly, additional issues remain to be addressed, and time constraints prevented me from covering every locality in detail. I have valued the opportunity to engage with residents and learn about the realities of both districts. I respectfully request your support and assure you of my continued commitment to residents, regardless of the outcome. Observing how both districts evolve in the coming months will be insightful, particularly if the PL is re-elected. While some individuals express disappointment with certain candidates, ministers, or parliamentary secretaries, I encourage you not to abstain from voting. Instead, consider supporting new candidates on the PL’s ticket to effect change. Abstaining may inadvertently enable those who have disappointed you to be re-elected. Therefore, I urge you to participate in the election and make an informed choice. Furthermore, it is important to acknowledge the PL’s contributions to economic growth, social support, and national stability over the past few years.

Finally, I think Dr Robert Abela deserves another chance. His leadership contributed to continued stability. And frankly, Dr Abela has had to govern under exceptionally challenging circumstances, from shifting geopolitical realities and a global pandemic to yet another energy crisis stemming from the Middle East. Surely, we need to choose between stability and the unknown. And people stand to lose what they have achieved in the past years. The PL in government delivered most of its promises and improved people’s lives. Risking everything for an unknown recipe is not the best option. Hence, choose wisely.

The post Examining some of the realities of the second and ninth districts first appeared on The Malta Business Weekly.

Yet, such strong economic growth comes with its challenges. For instance, Malta today faces two systemic challenges: housing unaffordability and chronic traffic congestion.

To understand why a nation that is much wealthier today, than some 10 or 15 years ago, struggles with such fundamental issues, one would have to look past traditional supply-and-demand metrics and view the problem through the lens of behavioural economics – the study of how psychological biases, status, and human habits override rational economic decisions.

Traditional economics suggests that when an economy grows, everyone’s purchasing power should scale accordingly. However, the prevalent economic growth model adopted in Malta has left many low-to-middle-income earners, particularly youths, priced out of the housing market.

Malta’s economic growth required a massive influx of foreign workers to sustain momentum, coupled with a massive growth in tourists’ numbers. This caused an abrupt population spike, triggering specific behavioral shifts among investors and landlords.

Maltese investors have long exhibited a cultural bias toward brick-and-mortar investments, viewing property as the only “safe” asset class. When the population grew, a herding mentality took over. Capital flooded into the buy-to-let market and short-term tourist rentals (like Airbnb) because landlords chased immediate, high-yield gains from foreign workers and tourists. Landlords looked at the highest-paying segment of the market – foreign tech and finance executives – and mistakenly treated this premium demand as the baseline for the entire market. As a result, the development of affordable, traditional family homes was abandoned in favour of smaller, high-density apartments aimed at transient workers. While average domestic wages grew steadily, they could not compete with the compounded momentum of capital, creating an environment where a young couple on average incomes can barely access a fraction of the market without substantial parental support. The psychological security historically attached to Maltese homeownership has transformed into an anxiety-inducing financial barrier. Add to this reality is that any fiscal incentive to help make housing more affordable will likely make housing more expensive, as this will likely result in a short-term demand boost.

If housing is an issue born of rapid population growth, gridlock is another issue born of population growth coupled with psychological paralysis. Ahead of general elections, political parties frequently float grand promises of mass transport solutions. From a behavioural economics standpoint, none of these multi-billion-euro systems will ever be feasible or self-sustaining unless any government actively introduces pain points (disincentives) for private car use.

After all, Malta already made its scheduled bus service completely free for residents. Yet, the roads remain paralysed. Why? Commuters prefer the immediate comfort, privacy, and perceived autonomy of their air-conditioned car today, even if they know it means sitting in gridlock. They heavily discount the long-term societal costs (pollution, wasted time, respiratory illnesses) because the immediate alternative (waiting for a bus in the summer heat) feels like a loss. Moreover, in Malta, the private vehicle is deeply tied to social status. Decades of outdated urban planning have conditioned the collective psyche to view public transport as a low-status alternative. All the research in the world indicate that human beings are far more motivated by avoiding a loss than acquiring a gain. Offering “free mass transport” is a gain, and clearly, it is not enough to break old habits. To trigger a genuine modal shift, private car use must be made inconvenient or expensive through disincentives like implementing strict parking management, reducing free street parking, introducing congestion charges in heavily choked urban cores or repurposing car lanes exclusively into bus and active-mobility lanes, deliberately tipping the time-advantage in favour of public transit. Without these uncomfortable “stick” measures, any new mass transit infrastructure will become a financial white elephant, under-utilised while drivers remain frozen in traffic.

In the meantime, while a comprehensive mass transit network remains a distant reality, a high-frequency, tech-driven shared ride ecosystem could offer the immediate intervention Malta desperately needs. However, for this to work, it must be backed by aggressive fiscal incentives – such as corporate tax rebates for shared employee commutes or direct subsidies that make ridesharing cheaper than running a private car. By pairing these financial carrots with the on-demand convenience and air-conditioned privacy of a personal vehicle, dynamic ridesharing can directly challenge the status of private car ownership, allowing drivers to surrender the hassle of parking while instantly cutting the single-occupancy vehicles paralysing the roads.

Going forward, Malta must urgently pivot toward an economic transformation where growth is driven not by the unsustainable scaling of physical inputs – such as importing more labour and pouring more concrete – but by maximising value-added output per worker: true productivity. This structural shift can only be realised by aggressively injecting digital investment into existing economic sectors and strategically attracting new, high-value-added industries that require a smaller physical footprint but yield higher economic returns. However, executing this transition is exceptionally delicate. Given Malta’s currently high government expenditure, policymakers face the added pressure of financing and managing this massive economic overhaul with precision, ensuring that the transition does not inadvertently trigger lower economic growth or disrupt near-term stability. Balancing the withdrawal of old growth drivers while simultaneously nurturing high-tech productivity, all without denting economic momentum, represents one of the most formidable economic challenges the island has ever faced.

Malta’s current predicament serves as a stark reminder that an economy is not a collection of isolated columns on a spreadsheet, but a massive, deeply interlinked ecosystem. You cannot aggressively expand the labour market without instantly shocking the housing market. You cannot fix the housing shortage by simply pouring more concrete without worsening urban density and strain on utilities. You certainly cannot fix the traffic crisis by building more infrastructure if you leave the psychological incentives of driving untouched. True economic stewardship requires managing the invisible threads that connect behavioral and cultural attitudes with wealth and environmental limits. If a country only manages the numbers that go up, it will eventually be crushed by the unintended consequences that follow. To avoid this requires stepping from our comfort zone of instant gratification and short-term measures to one based on discipline and longer-term mindset.

Ultimately the mindset and policy decisions that brought us strong economic growth, will not be what is now needed to achieve sustainable economic growth. That is the basic underlying common theme of Vision 2050, which should become a true action programme.

The post What got us here won’t save us first appeared on The Malta Business Weekly.

Now, the latest calculations by several academic and independent institutes estimate the figure to be even higher.  Benefits include cultural exchange, career opportunities (especially for young people), and simplified travel (e.g. no roaming charges, easier paperwork).  Significantly, this shift has been gradual but relentless.  It is driven partly by demographic factors: the age profile of how people voted in 2016 was such that, 10 years later, even if nobody had changed their mind, there would be a majority in favour of EU membership.  Furthermore, it is also driven by those “Leave” voters who were not gung-ho Brexiteers realising that Brexit bears no resemblance to what was promised.  

They were told that it would be easy, save lots of money (that billions would go to the NHS) and keep access to Europe while securing wonderful new trade deals across the planet.   It is true that UK increased trade with non-EU countries (e.g. US, China, India, Australia via new FTAs), partially offsetting EU declines.  However, new deals have had minimal GDP impact so far (e.g. ~0.1% each for Japan/Australia).

A significant number of “Leave” voters have therefore changed their view, especially if they work in a sector that has been particularly affected, or if they have been irritated by the multiple little things that Brexit has made more difficult, starting from ordering small packages abroad to joining the longer non-EU queue at border checkpoints if they travel. 

Neither of these two drivers of the shift in opinion – demography and changing minds – is going to go in reverse. Such an economic loss has tangible consequences.  It would have produced an extra £80 or £90 billion every year in tax revenue.  

The government is seeking to attenuate the economic damage of Brexit by aligning with the EU single market standards and rules in various sectors, to cut red tape, paperwork and border inspections.  It is starting with agriculture and energy, hoping to move on to other sectors such as chemicals and pharmaceuticals.  

This is sensible.  But it is slow, won’t change the economic dial for years, and if it succeeds will align Britain with EU rules on which it has no say when the EU wants to change them, virtually turning the UK into a non-voting member of the EU.  

Many are beginning to ask why not go the whole way and get Britain’s seat back at the table where decisions are taken that will in any case affect it.   With Putin on one side and Trump on the other, it is becoming more obvious by the day that the interests and values of Britain and its EU neighbours converge.  

Obviously, Britain can certainly no longer rely on a supposed “Special Relationship” with the United States, a notion given its last rites by Trump.  Many economists seem to be reaching the same conclusion. As an example, Iceland is to hold a referendum in August on applying to join the EU.  

In Norway a debate has started.  Every country in the western Balkans wants to join (some are already deep into their accession negotiations), as do Ukraine and Moldova.  If, Britain insists to stay out it will look isolated and irrelevant on the world stage.  Contrarily to Neville Farage’s political creed in favour of Brexit, this has turned out to be even more costly than anticipated.   

Recalling major analyses from economists at Stanford, NBER, and others; they conclude that by 2025, Brexit reduced UK GDP by 6–8% compared to a no-Brexit scenario.  Many now see Brexit as having failed to deliver promised gains, with regret increasing over time.  Will the blushing bride step forward?

George M Mangion is a Senior Partner at PKF Malta 

The post Is Britain wooing EU as a bride? first appeared on The Malta Business Weekly.

The Malta Maritime Forum (MMF) has called for active measures to strengthen Malta’s position as a regional maritime hub, warning that growing geopolitical uncertainty, regulatory pressures and the transition towards decarbonisation are reshaping the global shipping landscape.

Addressing the Forum’s Annual General Assembly held at MaritimeMT, MMF chairman Godwin Xerri presented a 77-point maritime-centred electoral manifesto aimed at reinforcing the sector’s strategic contribution to the Maltese economy ahead of the next general election.

The proposals, which have already been presented to Malta’s main political parties, focus on four key areas: governance, the National Maritime Transport Strategy, education and skills, and infrastructure. Central among the recommendations is the re-establishment of a National Maritime Authority, a measure the forum argues would improve coordination, accelerate decision-making and provide clearer strategic direction for the industry.

Xerri also called for the appointment of a minister specifically responsible for maritime affairs, supported by a permanent interministerial structure to strengthen coordination across government.

“The common objective across all proposals is to strengthen the industry’s role within the economy and position Malta as a leading regional maritime hub,” he said.

The MMF stressed that Malta’s maritime policies must align both with the government’s Vision 2050 framework and emerging European Union strategies. Xerri argued that EU policies should better reflect the realities faced by island states such as Malta, particularly as the industry grapples with digitalisation and decarbonisation requirements.

Among the forum’s proposals are measures to enhance the competitiveness of the Malta ship registry, attract investment in ship finance and support the development of clean-fuel bunkering infrastructure.

On infrastructure, the MMF reiterated its call for new multi-purpose quays within the Grand Harbour and urged the government to proceed with the long-delayed Ras Ħanżir project before works linked to the Grand Harbour Revival Plan commence. The forum also renewed calls for a full nautical risk assessment to safeguard existing and future commercial port activity.

Addressing members during the assembly, MMF CEO Kevin J. Borg outlined the organisation’s lobbying efforts in Brussels, particularly concerning the European Union Emissions Trading System (EU ETS).

Borg said an MMF delegation had met European Commission officials, Maltese MEPs and European Commissioner Glenn Micallef earlier this year to highlight concerns about carbon leakage and business competitiveness arising from the current ETS framework.

While supporting the principle behind the emissions system, the forum argued that revisions are needed to better reflect the operational realities of European ports and maritime operators.

The MMF has also submitted formal positions to the European Commission regarding the EU’s Islands and Coastal Communities Communication, as well as proposed Ports and Maritime Industrial strategies.

Meanwhile, Kenneth Farrugia, CEO of Bank of Valletta, highlighted the banking sector’s role in supporting the industry’s next phase of growth.

Farrugia pointed to opportunities in ship finance and noted that the bank is exploring syndicated financing structures in collaboration with the MMF. He also emphasised the importance of financing digitalisation and green investments through partnerships with the European Investment Bank and the Malta Development Bank.

The BOV CEO underlined the importance of compliance, transparency and anti-money laundering procedures, while noting that a resilient maritime ecosystem remains critical to Malta’s wider economy given the country’s dependence on maritime connectivity.

Economic projections presented by economist Gordon Cordina showed the maritime industry continued to expand steadily between 2018 and 2025, driven by port activities, maritime business services and water transport.

Cordina said the sector now generates 4.8% of Malta’s value added while accounting for around 2% of national employment, making labour productivity in the industry more than double the economy-wide average.

He noted that future growth should increasingly focus on high-productivity services such as regulatory and governance functions, maritime finance and legal services, as well as education and human capital development.

“The industry is of systemic importance to Malta’s economic model,” Cordina said, adding that continued competitiveness and sustainability would be essential for long-term economic resilience and the successful implementation of the National Maritime Transport Strategy.

He concluded that Malta’s maritime ambitions under Vision 2050 would depend on continued innovation, private investment and political commitment to higher-value maritime services.

The post Malta Maritime Forum calls for dedicated authority as sector targets high-value growth first appeared on The Malta Business Weekly.

Despite remaining above its long-term average, economic sentiment weakened as confidence in the industry and the services sectors declined. On balance, according to the European Commission’s Economic Uncertainty Indicator, there was less economic certainty surrounding decisions made by respondents in April.

Supply and demand conditions in the property market remain strong. In April, residential permits were higher on a year earlier, but commercial permits were lower. Meanwhile, both the number of residential promise-of-sale agreements and the number of final deeds of sale increased on a year earlier.

The labour market shows some signs of easing. In April, the European Commission’s Employment Expectations Indicator, fell below its historical average. The unemployment rate in March remained unchanged at 3.5% for the third consecutive month, though it was higher than the rate recorded in the same month a year earlier.

Malta’s inflation rate rose in April but stood well below that in the euro area. The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) edged up to 2.5% in April, while HICP inflation excluding food and energy remained unchanged at 2.4%. Across the euro area, HICP inflation was higher than that in Malta due to an increase in energy inflation. However, when excluding energy and food prices, HICP inflation in Malta was higher. According to the Retail Price Index (RPI), inflation in April edged up to 2.8%.

In March, the Consolidated Fund registered a larger deficit compared with that recorded a year earlier, due to higher expenditure coupled with a decline in revenue, brought about by lower tax receipts.

The annual rate of change of Maltese residents’ deposits rose, while credit grew at an unchanged annual rate in March, compared with February.

The full Economic Update is available here.

The post Economic sentiment moderates but remains around its long-term average first appeared on The Malta Business Weekly.

The project, which started in 2022, represents a private investment of nearly €60 million and is expected to create more high-quality jobs, introduce advanced technology and provide specialised training opportunities for Maltese and Gozitan workers, a government statement said.

Accompanied by Economy Minister Silvio Schembri, Abela said the expansion further strengthens Malta’s position as a centre for advanced manufacturing and security printing.

The investment includes the installation of advanced visual systems and more efficient production processes aimed at improving productivity and competitiveness.

Speaking during the inauguration, Abela described De La Rue as a strategic partner in Malta’s economic development. He said the continuation of such investment in Malta could not be taken for granted and was the result of what he called a climate of trust, stability and business-friendly economic policies.

The Prime Minister noted that despite major international changes within the De La Rue group, Malta has remained central to the company’s future plans.

“This confirms the skills of our workers and the competitiveness that our country has achieved,” Abela said, adding that the company had continued to believe in the potential of Maltese and Gozitan employees by investing in training and creating quality employment opportunities for hundreds of families.

Abela also referred to other recent industrial investments, including the expansion of STMicroelectronics and the announcement of investment by Vantive in the medical and pharmaceutical sector.

“These are clear examples of how Malta is continuing to diversify its economy and attract investment in high value-added sectors,” he said.

Schembri said the De La Rue project was the direct result of what he described as a strong and stable economy built over recent years.

“It is precisely this environment of stability and certainty that gives international companies of this level the confidence to continue investing, expanding their operations and creating more added value and quality jobs in Malta,” Schembri said.

He added that the investment would strengthen Malta’s competitiveness while contributing to sustainable economic growth.

The post De La Rue completes €60 million Malta expansion as Abela hails manufacturing confidence first appeared on The Malta Business Weekly.

The airport said in a statement that the project is expected to be completed by 2028, ahead of the target date stipulated by the Alternative Fuels Infrastructure Regulation (AFIR) for airports forming part of the Trans-European Network to supply grid electricity to remote aircraft parking stands.

 “This investment forms part of a broader roadmap through which we will continue to deploy low-emission technologies and expand the use of solar power. By embarking on our most ambitious project yet, we are reaffirming our commitment to address Scope 3 emissions, while contributing to Malta’s climate targets and the wider European airport industry’s journey towards decarbonisation,” Justine Baldacchino, Head of Sustainability and Analytics at Malta International Airport, said.

The project will introduce 35 hatch-pit systems, supplying parked aircraft with a direct provision of electricity during ground operations. This will eliminate the use of diesel-powered Ground Power Units (GPUs), reducing carbon dioxide emissions significantly.

Aprons where hatch-pit installation is not technically feasible will be served by mobile battery GPUs together with the necessary charging infrastructure comprising 20 charging points. Additionally, the investment will provide for the installation of 15 electric bus charging points, supporting ground handlers in making the transition to cleaner vehicles.

At the heart of the programme is a major upgrade to the airport’s electrical infrastructure, including the introduction of five medium-voltage substations, two generators, and an electrical network with peak installed capacity of 7.5 MVA. Integration with the national grid, with the support of the island’s electricity services provider, will ensure stability and reliability.

This project is co-financed by the European Union with a grant of €5.4 million received through the Alternative Fuels Infrastructure Facility (AFIF). AFIF is a funding instrument under the Connecting Europe Facility (CEF) that supports the decarbonisation of Europe’s transport sector and contributes towards the European Union’s objective of achieving climate neutrality by 2050.

The post Airfield electrification at MIA set to avoid 1,000 tonnes of carbon dioxide emissions every year first appeared on The Malta Business Weekly.

The report projects Malta’s economy to grow by 3.7% this year, the highest rate among the EU’s 27 member states. Growth is then expected to ease only marginally to 3.6% in 2027, after reaching 4% last year.

Despite the slight slowdown, Malta is forecast to remain the bloc’s fastest-growing economy, well above the EU average growth rates of 1.1% in 2026 and 1.4% in 2027.

The Commission attributed Malta’s strong performance largely to its services sector, particularly tourism, which it said “outperformed expectations in 2025”. The tourism industry is expected to remain resilient despite global geopolitical uncertainty.

Malta is also forecast to record one of the strongest employment growth rates in Europe, with employment expected to rise by 3.9% in 2025. Although job growth is expected to moderate in the coming years, unemployment is projected to remain low at around 3%.

At the same time, the Commission noted that Malta was among the countries registering a relatively sharp increase in unemployment between mid-2025 and early 2026, with a rise of 0.6 percentage points.

Inflation is expected to edge upwards to 2.7% in 2026, driven mainly by higher international energy prices. However, the Commission said the government’s policy of subsidising energy prices would help shield consumers from the full impact of these increases.

The report also paints a positive picture of Malta’s public finances, with both the deficit and debt levels expected to remain comfortably within EU limits over the coming years.

The fiscal deficit is forecast to decline from 3.4% in 2024 to 2.2% the following year, supported by stronger government revenues linked to economic growth and improved tax collection.

Nevertheless, the Commission highlighted rising government expenditure, including substantial increases in the public sector wage bill and a one-off €71 million compensation payment awarded to former National Bank shareholders following a court ruling.

Tax revenues are expected to weaken slightly in the coming years as tax cuts announced in last October’s budget begin to take effect, while expenditure is projected to rise because of the growing cost of energy subsidies.

Even so, Malta’s fiscal deficit is expected to remain stable, edging down to 2.1% by 2027.

The country’s debt-to-GDP ratio is forecast to stabilise at around 46% over the next few years, according to the Commission.

The post Malta set to lead EU economic growth until 2027, Commission forecasts first appeared on The Malta Business Weekly.

Addressing a press conference during the handover ceremony, Prime Minister Robert Abela described the occasion as “a proud day” for the country, highlighting both the complexity and importance of the project.

“This was a project that was not easy to facilitate,” Abela said, referring to the investment’s status as an Important Project of Common European Interest (IPCEI).

He noted that the initiative differs from traditional industrial investments because of the highly specialised sector in which it operates.

Abela said the investment aligns closely with the government’s long-term economic vision, centred on innovation, technology and workforce development.

“STMicroelectronics is the largest company that has invested in Malta,” he said, adding that the government wants “an economy that facilitates the reskilling and upskilling of our workers.”

Abela also praised the resilience shown throughout the project’s implementation, saying that “even with Storm Harry working against us, we still delivered.”

Economy Minister Silvio Schembri described the handover as another key milestone towards the launch of what he called Malta’s first smart factory.

“After months of close collaboration between the government and STMicroelectronics, we are taking the next step towards the opening of the first smart factory in Malta,” Schembri said.

Schembri said the strategic importance of the semiconductor industry, noting that while Malta lacks natural resources, it must instead build its economic strength through knowledge, innovation and specialised industries.

“As a country we don’t have natural resources, so we need to be intelligent enough so that what nature didn’t give us, we create for ourselves,” he said.

Schembri pointed to the growing importance of microchips in modern life, describing them as essential components found in everything from mobile phones and cars to medical equipment.

“Microchips have become just as important as oil,” he said.

He explained that the investment goes beyond safeguarding STMicroelectronics’ local operations and is intended to establish Malta as a recognised player in semiconductor manufacturing.

“We need to ensure not only the operation of ST in our country, but this investment has a more strategic intent: to position Malta as an important country in the production of microchips,” Schembri said.

Schembri also highlighted ongoing efforts to strengthen Malta’s talent pipeline, including initiatives to send students abroad to contribute to semiconductor research and development.

Linking the project to the government’s long-term national strategy, Schembri noted that advanced manufacturing is one of the seven priority sectors identified in the Malta Vision 2050 framework.

He added that Malta continues to attract high-quality foreign investment despite global geopolitical uncertainty.

“When we see the recent geopolitical climate, Malta remains that country which not only has the best economy in Europe, but attracts investment of the highest quality,” he said.

Schembri concluded by underlining the importance of continuing to upskill Maltese workers in order to create better career opportunities and higher wages in emerging technological sectors.

The post STMicroelectronics takes next step with KK3 factory handover first appeared on The Malta Business Weekly.

This evolving situation was laid bare at the International Charlemagne Prize ceremony in Aachen, Germany. The prestigious award was presented to former European Central Bank President and Italian Prime Minister Mario Draghi, recognised for his historic stewardship of the Euro. However, rather than delivering a celebratory retrospective speech, Draghi used the global podium to issue a chilling, clear-eyed deconstruction of post-Cold War Europe. He warned that the continent has arrived at a point of profound vulnerability, summarising the shift with the haunting observation that, for the first time in living memory, Europeans are truly alone together. The international framework that once guaranteed Europe’s security through the United States and fueled our growth through open trade with China has shattered.

Draghi argued that Europe’s traditional approach to governance, that of treating the Union as a post-political, purely administrative space governed by static rules and complex bureaucracy, is fundamentally obsolete. For decades, Brussels attempted to neutralise raw politics through market integration, but this reliance on external forces has left the continent dangerously exposed. Europe dismantled its external trade barriers and embraced global supply chains yet catastrophically failed to complete its internal market. Draghi correctly points out that Europe is now left with fractured capital markets, disconnected energy networks, and an economy heavily dependent on foreign demand. This structural failure is amplified by a widening chasm in innovation, particularly in Artificial Intelligence. Draghi warned that because AI advances exponentially with usage, early leaders will secure permanent advantages, and Europe is currently failing to mobilise the massive, coordinated capital required to compete.

To prevent systemic decline, Draghi called for a radical transition to “pragmatic federalism”. He urged European leaders to abandon the paralysing requirement for absolute consensus and the abuse of national vetoes, arguing that sluggish compromise is often more damaging than outright inaction. His solution demands an overhaul of institutional architecture, replacing an outdated EU budget focused on subsidies with a streamlined fund dedicated to joint sovereignty, innovation and defense. Crucially, Draghi reiterated that the sheer scale of this transition can only be financed through the issuance of common European debt, leveraging the collective financial might of the bloc to underwrite massive pan-European infrastructure.

Yet, the Aachen ceremony did not just reveal a unified path forward; it exposed the deep ideological rifts that shape today’s Europe. Standing at the same podium to deliver the eulogy, German Chancellor Friedrich Merz enthusiastically agreed with Draghi’s grim diagnosis but directly attacked his proposed cure. Merz agreed that Europe behaves like a twentieth-century bureaucracy unsuited for twenty-first-century challenges, endorsing a total modernisation of the EU budget away from traditional regional and agricultural subsidies toward raw military power and economic competitiveness.

However, Merz drew an unyielding line regarding how to fund this new era. He explicitly rejected the concept of joint European borrowing, stating that Germany cannot follow the path of new EU debt for constitutional reasons, and warning that excessive indebtedness threatens national sovereignty while limiting the capacity to act. Furthermore, Merz’s stance implicitly defended Germany’s export-driven economic model, clashing with Draghi’s view that an obsession with chasing external trade deals has allowed European nations to evade the painful internal reforms required to build a self-sufficient single market.

Notwithstanding any macro-fiscal disagreement on the underlying funding mechanisms, the strategic consensus on the imperative to transition toward a model of “pragmatic federalism” is rapidly gaining institutional momentum. Europe is increasingly realising that deeper integration is the sole mechanism viable to safeguard its economic hegemony and geopolitical relevance in a fragmented global economy. Down this hyper-integrated route, Malta—as the smallest EU member state—faces asymmetric vulnerability, particularly regarding its fiscal sovereignty. This shift could imperil vital competitive instruments like our current six-sevenths tax imputation system. This specific mechanism has historically generated robust corporate income tax yield, allowing Malta to offset structural deficits and maintain ever-expanding public expenditure within a sustainable macroeconomic remit. Whilst the domestic run-up to the general election features an escalatory cycle of expansionary promises that will inevitably bloat public recurrent expenditure, this evolving macroeconomic backdrop constitutes a binding constraint risk that cannot be ignored.

The post The reality that awaits us first appeared on The Malta Business Weekly.