A well-performing economy usually fills the pockets of the majority of the people. At times of prosperity, it is natural the people attribute the economic well-being to the government, as much as they are likely to blame it when things go wrong for them.
The most recent Eurobarometer survey reflects the feel-good factor of the majority of the Maltese people who are benefitting from strong economic growth and low unemployment. The Maltese are twice as likely to expect a positive economic situation in 2019 as their EU counterparts. The great majority of Maltese also feel that, in 2019, their financial situation would improve or remain the same.
On the political front, a high 63 per cent said they trust the government. This approval rate is the highest in the EU.
The fly in the ointment in this survey is that 54 per cent of respondents do not trust political parties. This statistic is not a good omen for a democratic system built on political parties that govern, or aim to govern, the country.
Malta has a very open economy where our destiny depends not merely on what we do in our small island. We are often affected by the tailwinds coming from Europe and beyond. The Eurobarometer survey gives some indication of what fellow Europeans think about the economic and political situation in the Union.
Eighty-three per cent of Europeans seem to be happy with the free movement of citizens and 75 per cent believe the adoption of the euro is still a positive thing for Europe.
On the economic side, a mere 49 per cent are positive about their country’s economic situation. Presumably, the other 51 per cent are not or do not care.
Many Europeans are worried about migration and terrorism and only 18 per cent consider the economic prospect within the EU to be of concern. The rise in inflation and unemployment worry about one in four Europeans.
Eurobarometer surveys are important because they capture the mood of people at one point in time. However, moods could change quickly and public opinion is fickle. Forecasts made by institutions like the European Central Bank and the International Monetary Fund are less sanguine. The looming trade war between the US and the rest of the world, geopolitical problems in Europe, especially in the context of Brexit and social unrest in France, and the rise of populist parties are some of the known risks that threaten the EU’s prosperity. Global economic growth is forecast to slow down. Economic analysts are rather pessimistic about the near future with some predicting a recession in a number of EU states.
Malta has its particular issues to address, including the negative perceptions about the country’s governance and the sustainability of certain economic activities. We need to address these issues now before any economic downturn in Europe that will almost certainly affect us.
The next major test that will gauge the mood of the great majority of Europeans will be the European Parliament elections in May. The rise of extreme parties of the right and the left may shake the governance structure of the EU. We have to wait to see the results of these elections that may change the way the EU functions.
Malta’s economic future will continue to depend on what happens beyond our shores.
This is a Times of Malta print editorial