Xtra | Clash over competence in economic governance dominate discussion

The debate on Malta’s economic outlook quickly turned into a clash over competence, long-term planning, and the country’s resilience in the face of global uncertainty during Thursday’s edition of Xtra, hosted by veteran journalist Saviour Balzan.

Economy Minister Silvio Schembri and Opposition spokesperson Jerome Caruana Cilia debated how Malta should navigate mounting international pressures, from geopolitical conflicts to inflationary shocks affecting global supply chains.

Schembri argued that Malta’s economic resilience ultimately hinges on the competence of those leading the country. Describing the current global climate as a “rough sea,” he insisted the country needs a steady hand at the helm. He pointed to the government’s track record in navigating recent crises, including the COVID-19 pandemic and the war in Ukraine, as evidence of its competence.

According to Schembri, Malta’s strong economic foundations have enabled it to shield consumers from volatility, particularly through stable energy prices maintained via subsidies. In thinly veiled remarks he referred to what he described as the competence of the current ‘captain of the ship’ Prime Minister Robert Abela when compared to the ‘other captain’ Opposition Leader Alex Borg.

The minister also revealed that he recently met freeport operators in Marseille to ensure maritime routes remain secure, highlighting concerns over supply chain disruptions.

Caruana Cilia countered that the Opposition is equally capable of managing crises, recalling how past Nationalist administrations mitigated the impact of international shocks such as the Libya crisis. While acknowledging broad agreement on the need for continued support to families and businesses, he stressed that subsidies must remain in place “for as long as necessary”, a point Schembri contested, suggesting the Opposition views such measures as temporary.

The PN spokesperson warned that prolonged crises would inevitably deepen their economic impact, calling for less partisanship and more focus on national interest. He also criticised what he described as government waste, arguing that curbing excess spending is essential to building a financial buffer for future shocks.

Imported inflation emerged as a key concern. Caruana Cilia highlighted how rising costs abroad are feeding into local prices, while Schembri maintained that not all inflation can be addressed with a single policy tool. He emphasised ongoing government monitoring of import prices and defended long-standing subsidies on fuel, electricity, and cereals as crucial for families and businesses.

Joining the discussion remotely, Paul Abela, president of the Malta Chamber of SMEs, noted that many businesses are absorbing higher import costs rather than passing them on to consumers.

He said this strategy helps sustain demand, even if it means reduced profit margins. Abela described the economy as generally performing well and expressed confidence in government support where needed.

However, Caruana Cilia pointed to structural issues such as traffic congestion, arguing that inefficiencies in transport are driving up operational costs and contributing to inflation. He cited surveys indicating that a significant portion of businesses believe the country is heading in the wrong direction, though he stopped short of painting an entirely negative picture.

He insisted that a PN government would tackle head on and with determination the issues this government is ignoring, repeatedly referring to traffic as a major issue.

Tourism also featured in the discussion. Schembri insisted Malta is not only attracting record numbers of visitors but also higher-spending tourists. He still mentioned record number of tourists as a feather in Malta’s cap. This was echoed by Carlo Micallef, CEO of the Malta Tourism Authority, who said Malta ranks among Europe’s top three destinations and continues to see strong demand for air connectivity despite global aviation challenges.