A small snippet of news this week shows how Maltese businesses may be affected by the international economic crisis, sometimes in ways that hardly surface in the media.
On Tuesday, this newspaper reported that International Hotel Investments (IHI, or the Corinthia Group to you and me), reported a handsome profit over last year, marking a 40 per cent increase over 2007. That profit covers hotels and investments in more than one continent and several European countries. So far, excellent news.
In the details, however, were a sign or two of possible threats. In Russia and the Czech Republic, for example, turnover was down. In Hungary, as with Malta, it remained stable. And those of you who have, like me, enjoyed the magnificent sights of the capital, Budapest, might reply: No wonder. The city divided by a river, with its Houses of Parliament, bridges, fishermen's bastions, Royal Palace, opera house and railway station made of wrought iron... How could such a city not have a thriving life for its magnificent hotels?
However, the case of Hungary is worth dwelling on a bit further. In Budapest, IHI manages some of the finest hotels of the city. Given that the financial crisis began to severely affect Hungary by the last quarter of last year, it is good news that IHI's turnover in that country remained stable.
I only mention this example, and not other Maltese investments, to make a simple point: the international economic crisis affects Malta not only because it has a direct effect on businesses based in Malta but also because it has a direct effect on Maltese businesses spread elsewhere.
Therefore, it is important that Maltese politicians keep an eye on international developments and seek to understand them. The appropriate level at which to do this would be at the European level. It is here that many pressures will be made on member states to react to solve the difficulties of certain other members. However, we must make sure that the solutions for certain countries do not, in turn, and unintentionally, create problems for a country like Malta.
As an example, take the case of Hungary again. It is a country with a proud history, even before it was one of the centres of the Austro-Hungarian empire. Its House of Parliaments is second in size only to that of Westminster. It was arguably the one most economically advanced among the central and eastern European countries that joined the EU in 2004.
But the financial crisis hit it right after Iceland. Last October, the country did not hesitate to turn to the EU and to the International Monetary Fund for a financial package and aid. That package amounted to €20 billion.
It still did not save the Hungarian Prime Minister, who offered his resignation last month. And it has not stopped Hungary from pushing forward a particular case for economic reform in the EU.
Briefly, some Hungarian experts and politicians are arguing that the fault for Hungary's current economic woes cannot be laid solely, or even mainly, outside its government's door. They acknowledge that previous governments had undertaken some risky economic policies in the 1990s in order to get through the post-communist transition effectively.
However, they also say that Hungary behaved well to meet the convergence criteria of the EU.
The current crisis has been caused, it is argued, by Hungary's meeting criteria that were not entirely suited for it and by an international crisis over which it could have had no control.
The upshot: a major member state is joining others to argue for more effective regulation, which it understands to be pan-European oversight and rules.
Here, a Maltese politician needs to pause. The motive behind such a proposal is understandable and good. But would such pan-European oversight work for Malta or cause more difficulties? The devil, they say, is in the detail.
It would not just be economic detail. There is politics as well. In arguing about such proposals, one would need to make sure that one must not exacerbate certain divisions that threaten to emerge in the EU, such as those between members of the eurozone and those outside, or between West and East. The last thing one would want to add to this crisis would be a division that replicates, in some fashion, the divisive "iron" curtain that an integrated Europe has managed to pull aside.
At the same time, Maltese MEPs, among others, must be in a position to understand Malta's economic and business interests well enough to be able to smell possible threats to those interests a mile away. And then they will need the guts to fight for those interests without, if possible, upsetting the affinity Malta has with other new member states. A tall order. But Malta's next group of MEPs will need to be able to handle it.
Dr Attard Montalto is a Labour member of the European Parliament.