The year which has just ended has seen the greatest challenge yet to the stability and future of the euro, Europe’s single currency. Government deficit overruns and banking loans gone sour in countries like Greece, Ireland and Portugal have tested the euro to its limits forcing the European Union to provide bailouts to these countries.

Germany, which has contributed the biggest share of these bailouts, has weathered the storm and, according to Chancellor Angela Merkel, “even emerged strengthened from the crisis”. Indeed, Germany’s exports are booming and the country enjoys a healthy trade surplus. The Chancellor’s call for all governments to show fiscal responsibility is backed by her country’s excellent performance. This makes her insistence that the euro must be strengthened all the more credible.

Chancellor Merkel’s faith in the euro, though, is in striking contrast with what the German public thinks. According to a recent survey, only 30 per cent would favour the euro if they had a choice. The prevalent feeling in Germany is that the country should not bail out “irresponsible” governments that fail to put their financial house in order. On the other hand, the stark truth is the failure of the euro would mean the failure of European integration.

In the light of all this, one expects the future of the euro and of European integration to feature prominently in the talks Chancellor Merkel will have with Prime Minister Lawrence Gonzi and other Maltese leaders during her two-day visit to the island starting today.

Dr Gonzi, like Ms Merkel, is a strong believer in the euro, which he credits with boosting the island’s economy. Malta has coped reasonably well with the economic and financial crisis and, thus, should not cause any particular concern to Germany.

The Chancellor is likely to seek Malta’s support for her view that the European Financial Stability Facility should be turned into a permanent feature that would oversee the ongoing crisis and that future recipients of bailouts be obliged to take stricter cost-cutting measures.

Malta considers Germany as a strong and reliable partner. Not only is it one of the island’s leading trade partners, German investment here is quite substantial, and has been so for decades, while the German tourist market is Malta’s second largest. Consolidating these positions and even enhancing them, should be a priority for both governments.

The continued strength of the German economy, by all accounts the European Union’s locomotive, should help to reach this aim. Malta, for its part, could seek to cater more specifically for the needs of the German market, for German business firms and investment and for German tourists.

Germany has helped Malta too by agreeing to resettle some of the thousands of illegal immigrants who have landed on our shores. Although the landings have stopped, the Maltese government is expected to continue to seek help from its European partners to provide a better future for these immigrants.

Despite the problems besetting her coalition government, with the Free Democrats, the Christian Democrats’ junior partners, now at their lowest ebb, Chancellor Merkel has shown remarkable leadership not only domestically but also on the European stage. Her call for fiscal responsibility on the part of the eurozone’s 17 members, coupled with her defence of the euro, no doubt meet with the support of the Maltese government.

So, in discussing ways of strengthening the European family, the leader of the EU’s largest economy and the leader of the smallest should find plenty of common ground.