Today, I had to write about the State of the Union speech delivered yesterday by the President of the European Commission. However, I did not have enough time to examine what’s been said and postponed the article for next week. An interrelated topic, however, is what is currently happening around Europe, especially its economies. As Malta stands today as a rare example of fiscal stability in a continent increasingly defined by economic turbulence and political disarray, the same cannot be said for France.
France, the eurozone’s second-largest economy, is wobbling on the edge of a fiscal cliff. Its national debt has ballooned to €3.346 trillion, which is 114% of GDP, while its deficit stands at 5.8%, nearly double the EU’s 3% threshold. The collapse of Prime Minister François Bayrou’s government following a failed austerity package has left President Emmanuel Macron struggling to appoint his fifth prime minister, Sebastien Lecornu, in under just two years. The political chaos is matched only by the economic malaise. France hasn’t balanced a budget since 1974 and now spends more on interest payments than on education. However, the irony is a little bitter to swallow. France is a country that must rearm Europe but finds itself financially disarmed. Even worse is the recent European Commission’s proposal to exempt countries from the six-pack and two-pack rules if their deficit, or part of it, relates to defence spending.
At times, it seems the EU Commission is driving economic policies that prioritise fiscal irresponsibility over social stability, deepening divides across member states rather than bridging them, especially in France. In tandem, Italy, a eurozone member state, fares no better. With a debt-to-GDP ratio second only to Greece, and GDP growth stagnating at 0.4%, the country remains mired in structural inefficiencies and political fragmentation. Belgium and Finland, while not in crisis, are hardly thriving. Belgium’s growth oscillates around 1%, and Finland’s at an insignificant 0.2%. These figures reflect a broader European trend of sluggish growth, ageing populations, and mounting fiscal pressures. Sincerely, the implications are profound. With a shrinking workforce due to an ageing population and low birth rates, this translates to lower productivity, reduced tax revenues, and increased strain on social welfare systems.
Now, contrast this grim representation unfolding across much of the EU with Malta’s statistics. With Fitch Ratings reaffirming Malta’s sovereign credit rating at A+ and a stable outlook, the country finds itself in a privileged position relative to its peers. It reflects not only robust growth but also a decade of strategic financial stewardship under the Labour Party in government. While much of Europe grapples with stagnation, debt spirals, and political paralysis, Malta’s trajectory offers a compelling counter-narrative; one of resilience, foresight, and sustained wealth. Fitch reports that since 2014, Malta’s economy has expanded by an astonishing 86%, compared to a mere 14% across the euro area. GDP growth has averaged 6.5% over the past decade, and per capita income now stands at 109% of the EU average. Surely, these figures are not accidental. They are the product of deliberate policy choices. Well, the same choices that have shielded the Maltese population from the worst of global shocks and positioned the country as one of the EU’s most dynamic economies. Ironically, these are the same policies criticised by the current Opposition.
Certainly, the Labour Party’s approach has been pragmatic, by mitigating crises inter alia, maintaining energy subsidies, investing in infrastructure, and expanding the labour force through targeted immigration and increased participation among Maltese nationals through the provision of free childcare. The result is a labour market that has grown exponentially. However, what happens in the EU affects us indirectly, and also directly. And therein lies the crux of Europe’s dilemma. The continent must rearm, not just militarily, but also economically. The war in Ukraine, Russian hybrid threats, and global instability demand a stronger, more unified EU. But where will the money come from? The answer, increasingly, is austerity. Governments are eyeing cuts to social welfare, pensions, and public services. In France, Bayrou’s failed budget proposed freezing welfare payments and cutting public holidays. The backlash was swift and fierce. Dissidents and discontent are rising, and the spectre of mass protests looms large. Across Europe, citizens are bracing for a new era of sacrifice. One that threatens to unravel the social contract that has defined post-war Europe, and the economic peace dividend.
Malta, by contrast, remains blessed. However, blessed not by chance, but by choice. Fuel and energy prices have been kept stable, even as global markets fluctuate. Wages have grown, and people have money in their pockets with the reduction in taxes last year. Yes, the national debt has surpassed €11 billion, and yes, governance challenges persist. But the fundamentals are strong. The budget deficit is narrowing, debt levels are stable at 47% of GDP, and the banking system is liquid, well-capitalised, and profitable. Malta’s current account surplus averages 7% of GDP, and its net external creditor position is among the highest in Europe.
Risibly, while Malta focuses on sustaining its growth, and families struggling to make ends meet elsewhere in the EU, Brussels appears distracted with GPS jamming. European Commission President Ursula von der Leyen recently made headlines, not for unveiling a bold economic roadmap, but for the jamming of her plane’s GPS system over Bulgarian airspace. The incident, allegedly caused by Russian interference, prompted a flurry of statements and press conferences by different institutions including NATO. However, von der Leyen’s remarks were swiftly contradicted by experts who noted that while GPS jamming is a serious concern, it is hardly new, and certainly not the existential threat that was portrayed. In fact, Flightradar24 contradicted von der Leyen’s claim of her plane being kept circulating for an hour, which in effect lasted only 10 minutes. Such rushed statements, delivered with dramatic flair, seemed more like a bid for relevance than a sober assessment of Europe’s priorities. At a time when the continent faces economic stagnation, rising debt, and social unrest, the fixation on von der Leyen’s plane feels misplaced. When asked, President Trump remarked that von der Leyen was lucky to be without her mobile phone for only 10 minutes.
Surely, the EU needs proper leadership focused on fiscal reform, industrial strategy, and social cohesion, not geopolitical theatrics. The disconnect is troubling. The EU is entering a new era; one defined by hard choices and uncertain outcomes. The continent must rearm, reform, and rebuild. But it must do so with clarity, courage, and competence. And Brussels must refocus not on jamming and spoofing GPS signals, but on jumpstarting economies.
The stakes are too high for anything less.
