In five years, Malta managed to work its way up from the bottom of the pile to 11th place in a list of eurozone countries ranked in terms of balanced growth in their economies.
In what will be seen as a feather in the island’s cap, minnow Malta and mighty Germany were named as the only two eurozone members which, over the last five years, managed to boost their economies in a balanced manner.
Malta, in fact, now ranks among the group of “moderate performers” alongside bigger economies such as Italy and France, according to a new report published in Brussels by Allianz SE, one of the leading financial services providers in the EU, and The Lisbon Council, a Brussels-based think tank.
The report, called the Euro Monitor, is designed to serve as a macroeconomic surveillance and early-warning tool, flagging up existing and emerging imbalances in eurozone members’ economies. It ranks the countries according to 15 quantitative indicators in four key categories: fiscal sustainability; competitiveness and domestic demand; jobs, productivity and resource efficiency; and private and foreign debt.
It notes that Malta managed a rapid improvement in its performance over the last five years, having ranked in the 16th and last position in 2005 and now ranking 11th according to the same criteria. The report is updated to September 2010.
The authors particularly commend Malta on reining in the structural deficit while managing a good performance in job creation.
Indeed, from the four categories, Malta did best in productivity and resource efficiency, ranking fifth best out of 16. On the other hand, it placed only 14th in the competitiveness and domestic demand ranking while achieving a respectable ninth for fiscal stability. A ranking for private and foreign debt was not applicable in Malta’s case, possibly because the bulk of the island’s debt is locally based.
The report concludes that Germany and Austria are the best performing economies in the eurozone while Ireland and Greece bring up the rear.
Addressing a press conference in Brussels on the report this week, Michael Heise, chief economist of Allianz SE and the principal author, said that since the introduction of the euro large imbalances had developed in the Union that threatened to undermine the credibility of the euro if not addressed decisively.
“Virtually all eurozone countries still face a massive task in getting their public finances back in order. Any retreat or perceived problems in progressing on this front is likely to weigh down the euro,” he said. “Primarily as a result of the economic downturn in 2008/2009, all eurozone countries – except Germany and Malta – have seen their overall measure of balanced growth decline since 2005.”
However, he said not one of the 16 countries in the eurozone could claim to be on a fully sustainable path for overall balanced growth, with the overwhelming majority “mired at more or less the same overall mediocre performance level”.
“No country – not even Germany – can count itself a top performer in 2010. And Portugal and Spain are especially vulnerable; an economic slowdown could push either country rating down further,” the study concludes.