As an institution, the EU has helped many European countries progress. Certainly, this also includes Malta, which has been a member of the Union since 2004. Generally, I see myself as a citizen of Europe and welcome the European confederation. Still, at the same time, I sometimes find myself upset over individual actions taken by this Brussels-based organization. For example, the relationship to individual nation states seems to be increasingly lacking and the EU-Parliament and its attached institutions now appear to be view themselves less as a part of a confederation and more as a separate “authority”. I do not want to portray a dark picture here but do wish to raise a few questions based on the treatment of EU-member state Malta.
At the end of last year, the rule of law in Malta was publicly drawn into question.
Here is the following statement of the European Union regarding the rule of law in Malta that can be found on EU’s homepage:
“Malta’s rule of law needs close monitoring“
In other words, the rule of law in Malta requires strict scrutiny. According to the statement, the island nation must take stronger action against money laundering and corruption, and the EU-commission should secure the freedom of the press. The background for the report concerning rule of law in Malta is the murder of blogger Daphne Caruana Galizia, who was killed last October by a mafia bomb. She had published reports of a potential involvement of the Prime Minister’s wife in the context of the Panama Papers. Undoubtedly, this crime was a tragedy, and it must be resolved and clarified 100% with all background issues illuminated. Still, to question a country’s entire rule of law is a highly questionable measure in this context. The EU apparently does not trust Malta with its own investigations and demands the involvement of Europol. In this context, I am particularly disturbed by the following passage:
“[…]Recent developments raise serious concerns about Malta’s governance, freedoms, and illegal activities, facilitated by the weakness of the systems in place.“
I would not have expected such a harsh assessment in this context and, given the gravity of such an act and the resulting implicit attack against Maltese democracy, I would have wished for a more balanced evaluation.
Ratings Agencies Give Malta Higher Marks for Exceptional Rule of Law
At the end of February, ratings agency DBRS once again upgraded it evaluation of Malta’s credit ranking. DRBS now ranks Malta in category “A” and sees the country’s future development as stable. Other rating agencies have mirrored that view in their categorizations. Standard & Poor and Moody’s also give Malta very high marks. The same applies in the area of future expectations, which in regard to Malta both agencies see as developing positively.
Fitch has also confirmed its excellent “A+” rating. When explaining its decision, Fitch stated that Malta possesses a high degree of rule of law. The basis for its evaluation included, among others, statistics for projected growth in gross domestic product, which achieved best values during the first three quarters. In addition, praise was accorded to the country’s extremely low unemployment rate as well as the low degree of inflation in relation to increasing per capita income.
Finance Minister Welcomes Improved Ratings
Malta’s Finance Minister Scicluna has stated he is satisfied with the development of his country. The ratings agencies have accordingly honored the efforts made and the results that they have produced. He linked the ratings to increasing property prices. Whereas real estate prices were increasing, the increase was still reasonable in comparison to growing income rates.
Ratings Agencies Conflict with EU
In this article, I wish to evaluate the apparent contradiction between the EU’s view of the status of the rule of law in Malta and that of the ratings agencies, which speaks for itself. We all remember the financial and Euro crisis of 2008–2009, during which the ratings agencies were heavily criticized for downgrading the credit rating of Greece. What they actually did do, however, was arrive at a sober comparison based on given statistics. The ratings agencies are acted no differently today. They will take existing data and determine a statistical probability. Medium-driven discussions and fears of re-election are excluded from that assessment. I will leave it up to our readers to form their opinions regarding the aforesaid subject matter.
- Current developments in crypto currencies and the blockchain on Malta - 24. May 2019
- Regulation of crypto currencies and ICOs — International comparison - 10. May 2019
- MFSA Publishes Guidance Note Against Crypto Scams & Appoints First VFA Agents - 29. April 2019
- Blockchain & AI Summit Malta + Blockchain University Degree Malta - 20. March 2019
- MFSA Publishes Consultation Guide on Cybersecurity Regulations for Blockchain Companies and VFA Agents - 12. March 2019
- Malta’s New Tech Authority: Malta Digital Innovation Authority (MDIA) - 5. March 2019
- OECD report: ICOs for SMEs an appropriate form of financing — under certain conditions - 11. February 2019
- Malta Warns Of Crypto Scams & Takes Blockchain Risks Seriously - 5. February 2019
- 5 Good reasons for locating a business in Malta, Blockchain Island - 14. January 2019
- Malta Initiates Task Force for Artificial Intelligence - 16. November 2018