Alexander Demarco will be Central Bank governor after parliament's green light

Alexander Demarco was unanimously approved by parliament’s Public Appointments Committee as governor of the Central Bank of Malta on Monday.

He will take over from Edward Scicluna whose five-year term ends on 31 December.

Committee chair Chris Agius will now write to the prime minister to inform him of the decision.

Demarco currently occupies the role of deputy governor and between July 2024 and July 2025 also occupied the role of acting governor after Scicluna temporarily suspended himself following criminal proceedings initiated against him in connection with the Vitals hospitals case.

During the committee meeting, Demarco was particularly grilled by Opposition MP Adrian Delia, who sought to elicit the candidate’s views on overpopulation and public debt.

Demarco said the question was not whether the country was overpopulated but what its carrying capacity is. He said no carrying capacity study was ever conducted and it’s not an easy thing to do.

The closest Malta ever came to identifying issues related to population was in 1963 when the Stolper Report said Malta suffered from overpopulation because the economy was not producing enough jobs to sustain a population that was in the region of 330,000. The report had recommended 10,000 people a year leave the islands.

Demarco insisted the issue was beyond mere population size, adding there were countries and cities with higher population densities than Malta where the quality of life is good.

To this extended explanation, Delia rebutted: “So, you recommend that we keep increasing the population size.”

Demarco insisted he was not saying so. “The Central Bank recommends that economic growth comes through increased productivity rather than the creation of more jobs in a country where almost everyone is employed,” he said.

When asked whether he was comfortable with Edward Scicluna’s decision as finance minister to raise the wage packet of the Central Bank governor just before his appointment in January 2021, Demarco insisted he did not know the facts to be able to comment about the matter.

Pressed by Delia, Demarco said “it’s not ideal that someone gives themself a wage rise.”

Demarco joined the Central Bank in 1984, having started as a clerk. He later worked in the bank’s Economic Research Department as a senior economist, and subsequently was appointed head of the EU and International Relations Department.

He was appointed deputy governor on 1 January 2014 and prior to his appointment, he headed the Financial Stability Department. Demarco was directly involved in the construction of the CBM’s first econometric model and responsible for macroeconomic projections. He was also actively involved in Malta’s EU membership preparations and negotiations, and subsequently in exchange rate policy considerations in connection with the preparations for participation in ERM II prior to Malta’s membership in the Eurosystem.

Demarco was a member on the supervisors’ board of the European Banking Authority and the European Central Bank until July 2017.