There has been too much focus on the first 10 years of Malta’s EU membership, when the issue should really be the next, according to economist Gordon Cordina.

Speaking to The Sunday Times of Malta in an interview, he said he was concerned that the issue has been reduced to a simplistic argument over whether membership was good or bad.

“To say whether it was good or bad, you would have to re-run history, taking Malta out of the EU and then comparing the two situations. You cannot compare before and after as there were so many factors in between, not the least of which is the recession,” he said.

He believes that economics works through both gravity and osmosis.

“Smaller bodies are attracted to larger ones – which is gravity – and resources flow from richer countries to poorer countries to equilibrate income levels – which is osmosis.

“All this was accelerated by our membership to the EU. And we also got the euro in the process, not a moment too late as the euro protected us in many ways through the financial crisis,” he said.

Malta’s positive performance compared with many other member states is a double-edged sword, he said, as it means it has lost its Objective One status – which entitled it to financial assistance.

“We joined with a per capita income level of less than 75 per cent of the average… I always expected us to reach 100 per cent by 2025-2030 but we are already at 87 per cent, not because we are doing better than expected but because of the disaster in other countries.

“At this rate we will probably converge by 2020,” he said.

The implication is clear: What will carry Malta’s economy forward after that?

“Every 10 years, our economy gets something new to bring about expansion. When this did not happen, for example in the 1980s, we were in real trouble. But in the past decades, EU membership pushed us and we leapfrogged and caught up. The question is then what will be that ‘next thing’ beyond 2020. What will be the stimulus?”

Dr Cordina sees Malta’s size as being a problem in this particular context.

“Rich member states have poor regions which still get funding. But Malta is considered to be a single region so the whole country will be reaching ‘convergence’ and we will lose direct funding.

“There are still centralised funds available but our businesses will have to gear up to apply for them. Until now we have performed very badly in this regard,” he warned.

The other option, he said, would be to think much more proactively outside the box.

“The present model of EU membership is very much a large country model, with different regions. We need to find a way to exploit our diversity, our smallness, our island mentality. Ideally, we should be a bridge to the outside world – Africa, Asia and the Middle East.

“There are those who want us to be the first in the EU class, trying to score higher, while others want to look outside the EU to see what opportunities there will be. This debate is starting but it has not yet been clearly articulated.”

He was less than impressed about the EU treatment of Malta, particularly when it comes to i-gaming.

“The EU is short-changing us on i-gaming, in all probability. We geared up with legislation that was tops at a global level, with this idea that the EU – through the Single Market rules – would permit us to offer a jurisdiction that would access the EU-wide market. And yet, we see that this idea has led many large countries in the EU to effectively block access from the Maltese jurisdiction to their markets.

“This is why I say that we cannot rely on the Single Market for services to promote our growth in this sector. As time goes by, probably more and more countries will get jealous of our gaming revenue.

“This sector is a prime example of why we should be thinking out of the box and thinking beyond the EU.

Dr Cordina said i-gaming is not the only economic sector to have a cycle of growth and plateau. Another was pharmaceuticals, an industry based on Bolar exemption, which is now having to re-invent itself.

“This was another typical 10-year thing. We move from one industry to another to another. This was always the way, with one sector being replaced by another. We are now talking about logistics, an integrated maritime policy and growth, and test beds for electromobility (electric vehicles)…

“The EU wants to develop electromobility much faster than has been happening, and the current climate negotiations are once again putting pressure on this. Why not transform Malta into a test bed? It would solve a problem for us, too.

“There opportunities are there. It is high time that we find the differentiating factor which allows us to build up our competitive advantage.

“The debate has to be started on how we are going to manage our EU membership to our best possible advantage. We cannot just look back and say the last 10 years were good for us and stop there.”