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In all the soul-searching, hand-wringing and chest-beating that is going on about the woes of Malta’s tourist industry, there is one aspect of the problem which never seems to merit a mention. It is the factor which dare not speak its name – which is very odd, considering that the issue was formally raised by the Leader of the Opposition only last year.
I refer, of course, to the vexed, and vexing question of whether the Maltese Lira is simply overvalued in the European marketplace in which this country has to exist and trade. The writing is surely on the wall, in very large letters. If we are to believe official statistics, tourist numbers are actually increasing (albeit not by nearly enough) but the money Malta earns from tourism is decreasing. Either these islands are attracting a much poorer breed of tourist – which is pretty unlikely in the current climate – or more and more tourists believe that Malta does not offer good value for money... and the key to that is the exchange rate.
Given the comparative strengths, the comparative significance and (most importantly of all) the support bases of the economies involved, how can the Lira be justified at GBP 1.61 or EUR 0.43? The answer is straightforward, if unpalatable. Malta as a country has for years put itself in the same position as commercial companies which asset-strip themselves to maintain an artificially high share price, or to put it in the words of the UK’s best peacetime Prime Minister of the last century “pawning the family silver” to maintain appearances.
It can’t last. Once the Eurozone states start comparing like for like and – even worse – your biggest market the UK (which is already deeply suspicious of, and opposed to, the
Euro) begins the comparison, it is going to take a whole lot more than some low-cost airlines to rescue Malta’s tourist industry.
National pride and political prestige are all very well. But are they worth wrecking a country’s biggest source of income?
Wylie Cunningham
Balzan
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