There is no doubt that the uncertainty surrounding the whole of the eurozone economy is becoming greater. A number of factors are contributing to this state of affairs, which we need to understand well.

The first point is the fact that we speak about the eurozone economy as a whole. However, we know well that not all the single economies comprising the eurozone are experiencing the same situation. Some have been hit very hard by the international crises of the last six years, while others have been through difficult patches but have pulled through.

For example, Italy has not come out of the recession, while France appears to have weathered the initial impact but it’s biting hard now. Germany has had economic growth of some significance, but has at times slowed down, like it has in the first six months of this year. Countries like Greece, Cyprus, Spain and Portugal have seen their economies shrink significantly, while other countries, such as Malta, have continued to grow.

Amid all this uncertainty, membership of the EU and the eurozone has provided Malta with a great deal of economic certainty

I would even say that in countries that have been impacted very negatively by the recession, there are one or two regions that have continued to grow. It is this lack of homogeneity in the economic performance of the various components of the eurozone that creates uncertainty. So we have one monetary policy and a common goal for fiscal policy, but not all economies are aligned in the same way to these economic tools. This sometimes makes analysts feel that the system is fundamentally flawed. I do not believe so. We simply have not yet found solutions to address the difficulties that some countries are facing.

This brings me to the second factor that is contributing to this uncertainty. It relates to the lack of decision-making on economic strategy.

The European Central Bank has taken the lead with a very loose monetary policy. However, this has not given the desired results because it may have needed to go further like the US and the UK did. It could well be that the ECB had to be mindful of conflicting views coming from the different member states.

Moreover, the loose economic policy could not leave the desired results while banking rules became tighter. Banks may have wished to lend more money but could not because of these tighter rules.

While the ECB has sought to be decisive in its approach, governments could not agree between them on the way forward on how to reconcile the need for fiscal consolidation and the need for economic growth. This lack of decision-making has created an anti-EU groundswell as witnessed in the last elections for the European Parliament. As this groundswell gathered momentum, governments became even less decisive and, as a consequence, the uncertainty surrounding the eurozone economy grew in intensity.

The third factor is the situation in the Ukraine, the Middle East and Iraq/Syria. The Ukraine and Russia have announced a ceasefire but it is not known how long it would last.

However, the sanctions that the EU has imposed on Russia do not just hit hard the Russian economy but also the eurozone economy, given the high level of international trade between the two. It is already being claimed that the slowdown of the German economy in the second quarter of this year is mainly due to these sanctions. This adds further to the uncertainty that exists.

Peace in the Middle East is still an elusive goal and whenever the situation worsens, there is the fear it would escalate into an all-out war.

Then there is the situation in Iraq and Syria which may lead to terrorist attacks of the type we had in September 2001. So all in all, the international political situation is not helping to reduce the uncertainty in the eurozone.

One may wonder how all this could be affecting Malta. So far, we do not seem to be feeling any negative impact. Even the loose monetary policy of the ECB is helping our economy.

The economic difficulties in the eurozone have not spilled on to our economy. It is as if we are immune to all these developments. In the short run we may be immune, but if this uncertainty protracts itself into the medium term, then it will start to affect us negatively.

So were we wrong in joining the EU and the eurozone?

I say definitely not. I believe that joining the EU and adopting the euro as our currency have been two key decisions that have led to our economic growth since 2003.

Ironically, amid all this uncertainty, membership of the EU and the eurozone has provided Malta with a great deal of economic certainty.