Many Gozitans might have hoped that with Malta's accession to the European Union, Gozo's peripherality would be reduced if not neutralised. Those more optimistic might have thought that the Union's Regional Policy would also help Gozo integrate fully in the common market and eventually in the global one. They might have been anxiously and gleefully awaiting accession so that the island's economy would flourish with the opening up of cornucopian opportunities.
Very few, if any, could have fathomed that with Malta's membership of the EU, Gozo's economy would be less "europeanised and globalised" and more peripheralised. No Gozitan in his right senses could have ever conceived that Gozo's exports would distort competition in the European market and even in the global one.
It is unthinkable and unbelievable.
The value of exports of goods from Gozo in 2006 was an insignificant €14 million; those from Malta exceeded €2,256 million. For the same year, intra-EU27 exports were €2,494,676 million.
Yet, EU law considers state aid granted to Gozo-based companies to mitigate the additional costs they necessarily incur in the inter-island transportation of their goods and products as incompatible with the internal market. That aid, in the eyes of the EU, distorts competition within the European market by favouring Gozitan undertakings. (This predicament applies also to Gozitan farmers and fishermen for whom there is a scheme for the free Gozo-Malta transportation of their produce and catches.) The local legal provision relating to aid to industry has to be repealed notwithstanding the harsh structural and permanent handicaps that enterprises in Gozo have to bear.
Gozo, with its double insularity, cannot possibly compete with businesses on mainland Europe. Gozo suffers from diseconomies of scale and scope. It has problems of accessibility to the European and international markets, of scarcity of human resources and land, of a small local market and of a high population density. Without support, Gozo can never be a good business proposition.
It is certainly not a coincidence that no foreign direct investment whatsoever has been coming to Gozo since Malta's application for accession and that unemployment on the island has been reaching new heights year after year ever since.
It might seem strange but it is true. Europeanisation can transform geographical areas, particularly double insular ones, and economic sectors, notably those that are island based, from boom to bust or the other way round.
Many Gozitans must have by now realised that reality. Hundreds of Gozitans in the wholesale and retail business and others involved in real estate activities and in the construction industry have been enjoying an unprecedented boom and life for them has been good, sometimes inexplicably so. But for workers in the manufacturing industry, and even for some in the tourism sector, life has been full of worry, uncertainty and dismissals.
For these latter workers, and for others, life could have been much less gloomy had Gozo been given NUTS level 2 status on Malta's accession to the EU. Had that been achieved, the island could have been allowed to receive local state aid, apart from EU funds, for its economic and social development.
In fact, many European islands benefit from statutory incentives systems that substantially neutralise their insular problems and make them competitive on the European market.
Admittedly, the government tried - perhaps not hard enough - to obtain that status for Gozo. Having failed to get that, it tried to negotiate a protocol for Gozo. But it failed on that too. Checkmated, the government then resorted to the last remaining and least effective option. It attached a Gozo declaration to the Treaty of Accession.
Notwithstanding its limitations, that declaration contained very important pronouncements that, if pursued in earnest and up to the hilt, would have given Gozo many of the rights that the island would have obtained with a NUTS II status.
Indeed, the final paragraph of that declaration states that before the EU decides on a new budget, and, therefore, before it decides on a new allocation of EU funding, Malta will request the Commission to report on the economic and social situation of Gozo. The report should focus in particular on the disparities in the social and economic development levels between Gozo and Malta. The Commission will be asked to propose ways, whether through EU funding or other measures, including state aid, of course, to ensure that the disparities between Gozo and Malta will keep on being reduced and that Gozo continues to integrate into the internal market on fair conditions.
In a special edition of the official newsletter Aġġornat in February 2003, Simon Busuttil, who was not only the head of the Cabinet-appointed Malta-EU Information Centre but also a key member of the accession negotiations team, stated the obvious and correctly wrote that "the first Gozo report will be carried out before the next EU budget that will be adopted in 2006. To be approved, the EU budget will need the agreement of all EU countries (unanimity), including Malta".
Unfortunately, however, the government failed to file the request with the European Commission in line with its solemn declaration.
As a result, Gozo in Europe could be more peripheralised than before.