Aweek is a long time in an international financial crisis. Interest rates around the globe have been cut and various governments have offered rescue packages for their countries' wobbling banking systems. Still, however, share prices continued to fall. The International Monetary Fund said the world was entering a major downturn in the face of the "most dangerous shock... since the 1930s". Recession is no longer a sensationalist media prediction but a startling reality.

Malta, we are being told, is buffered from the worst direct effects of it. There have been assurances that deposits in Maltese financial institutions should not be affected, even though Finance Minister Tonio Fenech described the crisis as the worst in 80 years.

Banks in Malta, we have been assured, have no liquidity or solvency problems. Furthermore, the government increased the minimum deposit guarantee to €100,000 to give people more peace of mind. This is all encouraging.

However, we would be fools to think that Malta will not suffer the indirect effects. These are likely to have a significant impact on our economy.

The most welcome growth in tourism we have experienced over the past two years is likely to dip in the coming months, since core markets - the UK included - have been hit hard by the credit crunch.

Tourist establishments will also suffer, together with everyone else, as a result of the removal of subsidies on water and electricity tariffs. The abrupt manner in which this necessary measure was communicated has only served to rub salt into as yet unopened wounds, though the pain was numbed temporarily by Mr Fenech's statement in Parliament that the government is considering introducing schemes to help those affected.

Predictably, the property sector has waded into the scene too - though there is, interestingly, open disagreement between various operators over what is happening to the market and what should be done about it.

According to the president of the Chamber of Medium and Small Enterprises (GRTU) property section, Sandro Chetcuti, a property crisis is looming and the government should intervene to draw back into the market buyers who are playing a waiting game. Among other things, the GRTU wants €20.9 million currently earmarked for the construction of 300 social housing units to be "redirected" and used for more appropriate incentives.

While any help offered to first time buyers in particular is welcome, it should never be at the expense of those who have no hope of getting on to the property ladder in the first place. So this proposal is a non-starter.

The question we should be asking is why the property sector in Malta has got into difficulties in the first place. The answer is relatively straightforward: because too many speculators took advantage of the feel-good factor that followed EU membership and built as a number apartments, most of which are small and overpriced, as they could - pricing a number of first time buyers out of the market in the meantime.

The last thing the government should do is intervene in a manner which would bail out these speculators, when this is a circumstance caused not by misfortune or a credit crisis, but by greed.

The market needs, to use a term favoured by estate agents, to "correct" itself. In other words, prices need to fall to more reasonable levels so that ordinary working people can afford them. Since we are blessed with a situation where obtaining credit from banks is still possible, property owners in Malta are in a much more fortunate position than those in the rest of the world.