Six months after Greece’s financial collapse, a second eurozone nation is facing the same fate. Ireland, once called the Celtic Tiger, is seeking the support of the IMF and the European Union to cope with its financial turmoil. The financial crisis is leading to a political crisis as Brian Cowen, the Taoiseach (Prime Minister), is struggling to have the Budget approved in the Dáil (Parliament) on December 7. In a press conference last Monday, Mr Cowen announced that once the Budget is approved he will ask for the dissolution of Parliament and the country will go to the polls early in the New Year.

But how did this crisis come about? Who’s next? Is Malta in any real danger of facing such a crisis?

The financial problems in Ireland cropped up when the banking system collapsed and the government had to bail out practically all the banks. For a number of years the Irish banks were lending at very low interest rates without any real vigilance. The property market was booming and house prices doubled and trebled. When the property bubble burst, many people could not afford to pay their mortgages and as a result the banks collapsed. The government had to step in but now the country is unable to cope with the enormity of the problem.

Analysts are suggesting that the problem is not going to stop in Ireland. It appears that next on the list are Spain and Portugal. These two countries too have the same problems as Ireland and within the next six months could well be asking for assistance or a bailout. The financial problems, according to these analysts, seem to be more acute in the periphery of the eurozone. Both Ireland and Greece are, in fact, on the periphery as are Spain and Portugal. There are, however, other countries on the edge of the eurozone and Malta is one of them. Am I suggesting Malta could face Ireland’s and Greece’s fate? Well that depends on us.

To the Maltese bankers’ credit we have a very strong banking system. This came about because our banks were always conservative in the way they lend. Those of us who approached local banks for a loan in the past know they were very careful with their cash. One had to produce all sorts of evidence to prove one was capable of taking on a loan and its monthly repayments. Probably at some point, some or most of us criticised the banks’ conservative attitudes, especially when all this was happening at a time when foreign banks were encouraging customers to borrow more than they required. I was one of them. I was always a critic of the Maltese banks’ bureaucratic approach. I was wrong and they were right.

There is another issue which saved our country: the government’s handling of the economy before and during the global recession. The Maltese government is taking unpopular decisions and has put on hold a number of electoral promises. The result of the government policies is that our deficit is being controlled and when compared to other EU countries our economy is doing relatively well. However, the worst of the global recession is not yet over. We have to be careful to consolidate what we have achieved together. One popular but bad decision could throw this country in the Irish and Greek waters (woes).

These are difficult times which require difficult decisions. As Ireland’s Premier said on Monday, in difficult times the interest of the nation should take precedence over the interest of parties. He is right. Although Malta is not facing Ireland’s crisis we have to acknowledge we are part of the world and very much part of Europe and the eurozone. It may seem attractive for the party in opposition to score political points during difficult times. Given the times of crisis, however, the people rightly so expect politicians to, more than ever before, act with political maturity and that politicians steer away from seeking political advantage at the country’s peril.