Many had predicted that once the summer holidays were over, the speculators would once more become very active on the international financial markets.

So far, this does not seem to have happened to any significant extent, especially in the trading of European sovereign bonds.

Why this has been the case can be attributed to a number of reasons. The European Central Bank had made it amply clear that it would do all it can to save the euro. Countries that had been under watch for their level of debt seem to have started undertaking the necessary reforms.

Across the Atlantic, attention is focused solely on the presidential elections, which to date, seem to have no clear favourite. Moreover, it has come to be recognised that the US may have a debt bigger than that of the eurozone. In fact, analysts have coined the term ‘fiscal cliff’, implying that the US economy is at the edge of the cliff and could tumble down if it does not address its public finances.

The credibility of credit rating agencies has also got knocked heavily and they may appear to be exercising a lower level of influence on financial markets. They also seem to be more cautious before pronouncing judgements.

There is also the realisation that countries like Japan and the UK are having their own problems in sustaining their fiscal deficits. Whether the relative quiet in the financial markets – they have been less volatile in recent weeks and days – is just the lull before the storm, remains to be seen. Maybe speculators are just waiting for the outcome of the US presidential elections before they get down to their business. However, they are also having to deal with greater scrutiny by financial regulators as the EU is seriously considering the introduction of the Tobin tax on financial transactions.

Yet, the economic news that is coming from the world’s leading economies, is not cheerful at all.

It is very evident that the economic growth that was expected to happen in the second half of this year will not be achieved as country after country announces it is expecting the start of a recovery in 2013 and not this year.

These estimates are supported by organisations such as the International Monetary Fund and the Organisation for Economic Cooperation and Development. Unemployment is on the rise and the people’s standard of living is deteriorating significantly in a number of countries.

Malta will not be exempted from the effects of these developments. Although, so far, we have withstood the challenges of five years of a difficult international economic environment, there will come a time when companies operating in Malta will start to face a drop in the demand for their goods and services.

In this respect, even Malta may be passing through a period of calm before we are faced once more with the negative effects of an international economic recession. We need to appreciate that this is not the result of our economic policies but the result of economic conditions that are outside our control.

I strongly believe that it will be already a great success if we were to maintain our current position, let alone improve it. We should not take the good results we have had in the last years for granted. These results should only serve to give us the right dose of self-confidence that we can make it once again. To make it, we will require the allocation of significant financial resources, similar to what happened in 2009. This is why the country needs prudent governance that can make the most of our resources to safeguard employment.