Trouble all around, and meanwhile, Malta’s laughing

Published: September 27, 2012 at 10:28am

Il Sole 24 Ore has run a piece on the (good) situation in Malta. I asked an Italian-speaking friend to translate the first bit at least.

Meanwhile, Malta shows the way

There’s a safe haven from the perfect financial storm which has all but sunk Mediterranean countries. Malta, the tiny island nation barely 83 kilometres from Sicily, is proving to be the place to seek refuge.

The list of companies, capital and private individuals relocating their assets to the island keeps growing.

There’s a new reason for the exodus, apart from the well-known quality of life, emerald sea and mild climate; the island’s extremely beneficial tax regime happens to be regulated by EU norms and standards and is totally transparent.

Until a few years ago, Malta, with a population barely over 400,000, resembled one of the Tortugas transplanted in the Mare Nostrum. Being the smallest European economy – although unique in being able to set up relations, through the use of English, the island’s second offical language, with the English-speaking west as well as with the Arab world – the island was restricted to tourism, real estate and business deals which were not always as crystal clear as its waters.

In 2008, Malta became a member of the Eurozone opening up to substantial changes. It gradually transformed itself into a low-cost financial services hub, managing to establish itself as a respected and well-known place in the field.

This was possible when the government chose to implement substantial economic reforms, including a widespread privatisation programme, extensive control on public spending, and even introducing divorce legislation as a token to keep up with the continent.

In turn, Malta obtained from Brussels the right to offer its fiscal benefits to European financial institutions, private banks and asset management houses, an irresistible offering this day and age.

As the crisis deepens and any capital is passed under the lens, instruments are created to trace it to the traditional hideouts (Andorra, Switzerland and Monaco).

Instead, Malta chooses to offer a safe and legally recognised haven for investors who wish to avoid unecessary risk. The first to understand the concept have been those who literally put their money out to sea.

As of this year, it is the Maltese flag that flies from the masts of the largest merchant fleet in Europe. More than 25 million tonnes have found their way into Malta’s shipping register. The decision to extend the register to accept private yachts has started to yield substantial results; over the last 12 months, more than 300 ‘foreign’ superyachts have turned Maltese.

Another effect of the island’s tax regime, designed to attract both individuals as well as companies, has been the arrival of online gaming operators, including big names such as Texas Hold’em.

A good example of what’s happening is the number of licences issued by the Maltese Gaming Authority; over 400 to as many internet based operators. The result being that, currently, for every three online gaming companies, one is registered in Malta. In certain countries like Denmark, this figure grows to over 60% of the total.

The Maltese, used to an absence of natural resources, can recognise a cornucopia.




62 Comments Comment

  1. elephant says:

    What a pity that Labour was, is and will always be envyous

  2. kev says:

    Now that this article has come to the fore, allow me to re-post my recent comment to it.

    It’s an interesting article. Sadly, the freedom he’s talking about is that of remnant Malta – the independent Malta we’ve just bid good-bye.

    Integration will ensure that we will eventully become as grey as the European mainland. Hopefully, we won’t become as bankrupt as Greece.

    Here’s the irony.

    We owe much of our financial security to our sound fiscal foundations, notwithstanding the PN’s 5-billion-euro borrowing spree which is now bringing us to our knees before our EU overlords.

    I suggest you read the ESM and Fiscal treaties. Read about the European Banking Union; about Draghi’s ‘unlimited bond-buying’ and his OMTs (Outright Monetary Transactions). Understand how it all works, because most of you people are not just LIVING an illusion – you ARE a living illusion.

    There is more irony.

    If Malta is forced to take up more debt to pour into the ESM bailout fund while facing massive inflation as a result of Draghi’s intended money-printing spree, we’ll be suffering more than just the kontijiet tad-dawl u l-ilma. Labour would have to face the buck if elected, as expected. The PN would conveniently have someone to blame, of course, but the REAL cause would remain hidden beneath tons of blissful ignorance and deceit.

    The global Ponzi is unwinding and the taxpayers are paying the price for the quadrillions of fiat money that should not exist. That is one major reality you’ll have to face some time soon.

    The only thing that’s saving us is tourism – which no doubt benefited from membership, even if transiently so. In fact, tourism remains our only hope, unless Lucky Joseph strikes oil (only to find out that much of the gains will either be flushed down the eurozone pit, or will go in EU contributions to help our poorer European compatriots).
    ……….

    Note: ghal min ma jafx, Mario Draghi – like Mario Monti an ex-Goldman Sachs frontman – is the President of the ever-more-powerful European Central Bank – the issuers and regulators of the money we’re all fighting about.

    • Jozef says:

      You will, one day, contradict yourself out of existence.

    • La Redoute says:

      It’s interesting that you count yourself out. Are Brussels suburbs immune to your dystopia?

    • maltawarrior says:

      @ kev

      you’re a lost resource doing the housework…

    • Galian says:

      Kev, we are still waiting for you to organise the first OccupyKastilja protest.

    • The chemist says:

      Bet that hurt Kev ! Do you think anyone at Super 1 know about ‘il sole 24’ ?

    • Harry Purdie says:

      So, Kevvy, we are illusions. Seems to fit you your other ‘illusions’.

      OK, I give up, you found me out. I am an illusion.

      I am a foreign emissary, representing an alien reptilian race, who has, over the years, impregnated our DNA into all world leaders. Soon we would have unleashed their latent reptilian DNA and conquerd the puny human race.

      However, you, with your superior insight and suspicious mind have found us out. I now will report back to my superiors and inform them that our conspiracy is broken. We will leave you in peace, rather than pieces. Bravo.

      • kev says:

        I know you’re dying for more, Purdie, and I know I’m highly crytpic at times, and I frustrate you so very much, because, deep inside, you’re not sure that everything is A-Okay – you want to know, but you don’t know where to start…

        But let me be serious now: the last time I upped the ante you must have had such an indigestion that you believed I fed you reptiles.

        And now you’re telling me you have reptillian DNA?

        Not for me to judge, Purdie. I would consult a doctor.

    • Brian says:

      @ Kev

      Mario Draghi is a liar and an Italian.

      The Maltese government is trying its damnest to avoid us having to go through the sad and sorrowful scenes we watch unfold in other European countries. Does Labour have a magic wand?

      No, it has a roadmap of bullshit. Labour has no idea how to run a country. This is not a board game. Yet Joseph Muscat is making gaffe after gaffe and he’s not yet there.

      I wish that there was a political party that could edge out, or rather iron out some PN policies, but it’s certainly not the Labour Party. Pity.

      • Jas says:

        @Brian

        Well said!

      • kev says:

        @Brian – Whether government “is trying its damnest” I don’t know. What I know for sure is that government is incompetent. The prime minister has not even voiced his opinion over the ECB proposal to bail out banks through the ESM, which is intended for sovereign ‘bailouts’.

        We will be pouring €511 million into this bottomless pit, yet our government Yes-men remain mum.

        Basta ghandna lil Tonio Fenech isahhan is-siggu. It-tifel ma jiswiex Karlin, but he is il-Ministru tal-Finanzi.

        As for Labour, please do not misread what I wrote. I did not say Labour has a magic wand. What I said is that the Ponzi scheme is unwinding and since Malta’s turn to taste the brew will probably come about during a Labour administration, then the PN will surely have PL to blame and the real cause would remain hidden.

        It serves Labour right, of course – haqqhom! Let them utter more nonsense!

        If I had to measure Labour’s EU stance by their MEPs’ performance, I’d say PL are no better than PN. It’s a sackful of bullshit painted in red and blue.

        As for Joseph himself – what can I say? With his luck he could be Malta’s lucky charm, but luck is for migrating birds.

        But all this hinders the truth from being exposed. Lilliput will remain Lilliput. You’ll all continue to believe we’re free and sovereign within this fantasised European paradise.

        And, sadly, with you one can only reach up to a level, because many of you here are so uninformed, you call pure facts, sometimes even enacted legislation, ‘conspiracy theories’. Indeed you’re so ‘educated’ that you wouldn’t even check links to official documents.

    • anthony says:

      Thanks.

      I have just discovered who this blessed Draghi is.

      Thanks to you.

      Thanks once again.

  3. Evarist Saliba says:

    I wish that local politicians would have the ability to speak in such clear terms on the real situation on the island. Government ones need to be less verbose and more focussed. Opposition ones less destructive.

  4. Just me says:

    This is the link to the article for those non believers who would like to read it and verify that the translation is perfectly correct.
    http://www.ilsole24ore.com/art/cultura/2012-09-18/intanto-malta-ride-140717.shtml?uuid=AbShMffG.

  5. Jozef says:

    Total assets managed by the island’s services exceeding 60 billion Euros
    26 banks holding between them EIGHT times the island’s GDP in deposits.
    A financial services sector employing over 10,000 highly specialised personnel.
    500 investment funds totalling 10 billion Euros transferred to the island in the last four years.
    An MFSA second only to Britain’s worldwide qualitywise.
    A national debt held by the Maltese themselves.

    I presume people could be fed up of this.

    A recent editorial on Maltastar suggested ‘trimming’ the profits made by the banks to more reasonable levels, that the financial services authority needs ‘revising’ and that the sector itself needs ‘guidance’.

  6. kev says:

    Eurozone hawks deal blow to bank bailout plans: http://euobserver.com/economic/117670

    Has Lawrence Gonzi or his sidekick Tonio Fenech stated their government’s position on ESM bank bailouts?

    Given that Malta is expected to be ready to pour over half a billion euros in borrowed money into the ESM (which is intended for sovereign bailouts), and given that our banks do not need a bailout, you’d expect a word or two.

    You fight over a few cents here and there, yet you say nothing when we are forced to contribute huge millions into a bottomless pit.

    • Harry Purdie says:

      It’s fascinating to watch a sinking dishwasher sink in his own sink.

    • H.P. Baxxter says:

      I already contribute millions so you can spout your bullshit courtesy of the EU, you dirty fucker.

      • kev says:

        I know you’re dying for more, Purdie, and I know I’m highly crytpic at times and I frustrate you so much because, deep inside, you’re not sure that everything is A-Okay – you want to know, but you don’t know where to start…

        But let me be serious now: the last time I upped the ante you must have had such an indigestion that you believed I fed you reptiles.

        And now you’re telling me you have reptillian DNA?

        Not for me to judge, Purdie. I would consult a doctor.

      • kev says:

        Baxxter, Baxxter… there’s another one.

        Here’s some free advice, H.P.

        You don’t need to believe. All you need is to know. And to know you’ll need to smarten up and UNDERSTAND.

        You can play alazobbok, you can play the smart Alec, you can even carry on calling me a “dirty fucker” (and perhaps something more original, too), but the fact remains that you’re LOST.

        And worse: You know it!

      • H.P. Baxxter says:

        Kevin, you are a skid mark on the fabric of spacetime.

    • A. Charles says:

      I see the name kev on the comments section of this blog and I cannot stop smiling; I remember the joke which says that a person broke his leg on the sink whilst tap-dancing.

    • La Redoute says:

      Who is Eurozone Hawks?

  7. Jozef says:

    And what superyachts, the two most innovative boats, design classics, both have a berth in Birgu.

    That requires an organic set-up of services, catering, technical know how, specialist equipment etc.

    When a prospective client of the island’s services asks, as he did, whether it’s easier to come down for his appointments by boat from Monaco or by private jet from London, things become interesting.

    It means a parallel synchronised evolution of the local aeronautical industry.

    Can we please discuss these matters on a national level, and stop the navel gazing?

  8. Il-Hajbu says:

    T’ghid, x’jahseb il-profs ta’ Brussell?

  9. Taks Fors says:

    Kev, Your comment only makes sense if taken out of the whole context of matters.

    Will you deny that the very fact that we are in the EU and equally important, in the Eurozone, has made Malta much better placed to attract such commerce? Inversely, do you honestly think that hadn’t Malta joined the EU as you and Labour insisted, we would have made such progress?

    Your write-up just shows how dangerous it is for Malta to be ruled by Joseph, Scicluna and the likes because you haven’t even grasped how this success came about let alone how to maintain and even improve it.

    The fact that you are already moaning that should Joseph get to power he will have an insurmountable task just shows that the only ‘economy’ you can think of is a Mintoffian one, with all the ills that that has brought to our country.

    The more I hear and read comments by people of your ilk the more I’m convinced of the capability of PN to run this country in a most economically successful way that is having a direct effect on you, me and readers here.

    • kev says:

      Go figure, Taks Fors.

      But the point is “ruled” by Gonzi or “ruled” by Joseph, we’re going to have fishcakes for dinner and you’re invited.

  10. David Gatt says:

    “I asked an Italian-speaking friend to translate the first bit at least.”

    Why do you need someone to translate Italian for you? Oh oh … you don’t say!

    [Daphne – I don’t speak Italian. Being perfectly bilingual is good enough. It’s better than most people in Malta can manage, who speak three languages badly.]

    • Min Weber says:

      “Being perfectly bilingual is good enough. It’s better than most people in Malta can manage, who speak three languages badly.”

      Never was a more intelligent thought expressed.

    • karen says:

      Daphne is just being professional and asked an Italian-speaking person to translate for her. We all know how precise and efficient she is. But it doesn’t mean that Daphne cannot understand or speak Italian.

      [Daphne – I can’t, in fact, speak Italian, though I can sort of follow a conversation and know some of the names for things.]

      “Hafna Maltin jasbu li huma esperti fit-Taljan ghax jifhmu it-telenovelas.”

      When we are in Malta for a visit, my Italian husband cannot even speak in English everywhere in Malta. It’s not the first time that he has been told by the Maltese that they prefer to speak to him in Italian as they feel more fluent due to the fact that they watch only Italian TV.

  11. Wayne Hewitt says:

    Under Labour of Mintoff prior the Nationalists took over the island looked like Tortuga… the infamous 17th century pirate island. Such was Mintoff’s fame worldwide.

    And there we will return if Joseph Muscat’s Mintoffjan movement is voted back in power.

    ‘Fino a qualche anno fa Malta, appena 430mila abitanti, assomigliava a un’isola della Tortuga, piantata nel cuore del mare nostrum: la più piccola economia europea (unica nel continente a parlare una lingua semitica e capace di dialogare – anche in inglese, seconda lingua ufficiale – con mondi diversi come quello arabo, latino e anglosassone) tirava a campare quasi esclusivamente di turismo, real estate e affari non sempre cristallini, almeno non quanto le sue acque. Nel 2008, dopo un sofferto referendum, il Paese è entrato a far parte della moneta unica. E si è trasformato in hub finanziario low cost riconosciuto e rispettato.’

  12. Village says:

    Europe is not only an economic project but also a political one. A population of 500 million with a global annual GDP of 14.3 trillion, it is second only to Asia.

    http://www.aljazeera.com/programmes/talktojazeera/2012/06/2012671377823450.html#.T9yZsewo5dY.facebook

  13. A. Charles says:

    http://www.thisismoney.co.uk/money/news/article-2106379/Offshore-tax-British-engineering-champion-Sir-James-Dyson.html

    This is another proof that Malta is doing the right thing in spite of the MLP Jeremiahs.

  14. GiovDeMartino says:

    I have been saying what Il Sole 24 had to say for ages. There is no place like Malta. I have several foreign friends, I have several relatives and friends even in New Zealand, I speak to several tourists visiting the Rotunda and that is exactly what they say: There is no better place than Malta. In all senses.

    • Angus Black says:

      I can vouch for what you wrote.

    • Harry Purdie says:

      I have just hosted Canadian in-laws who live in New Zealand. They were so impressed with our rock that are contemplating retiring here. They also now understand why I live here.

      • H.P. Baxxter says:

        Oh for fuck’s sake Harry. You said it yourself. It’s a fine place for retirees, maybe – if they have enough money. But not for anyone trying to build a career.

        Malta is an isolated rock. You can live well with an income above 50k p/a. Anything below that, and it’ll kill you.

  15. Rup says:

    You’re so enlightening kev… I’m impressed by your analysis.

    So much more persuasive than Italy’s foremost financial newspaper.

    You should be prof. Scicluna’s assistant when he is Finance Minister. The Laurel and Hardy of Maltese economic policy. Another Labour government, another fine mess.

  16. canon says:

    We should thank our lucky stars that Lawrence Gonzi was at the helm these last four years. To replace him now with Joseph Muscat, it will be tragic.

  17. completeness sake says:

    this is only partly translated…the last 1/3 which mentions some dark prospects is not shown here…

  18. Min Weber says:

    Sorry to interrupt. But this is no laughing matter.

    Will the Commissioner assume responsibility for this?

    http://www.timesofmalta.com/articles/view/20120927/local/court-finds-police-mismanagement-caused-major-hamrun-fight.438651

  19. Angel says:

    Why not translate the whole document ms caruana galizia ?!!

    [Daphne – Because I don’t speak Italy, Angel. If you want to translate the rest of it, go ahead.]

  20. NAZZBELT says:

    Hi Daphne, by any chance did you see the latest posts of Joe Grima on his Facebook?

    [Daphne – No, I’m waiting for somebody to send them to me.]

  21. GakkI says:

    Hi Kev, please go read Alfred Mifsud’s piece in The Malta Independent on Sunday of 23rd September. It should teach you a thing or two about our debt.

    His article was meant to play down Simon Busuttil’s claims but ironically ended up as praise for Nationalist economic policy.

    • kev says:

      Thanks for providing a link, Gakki – I had to trawl it through a google search as their site is pre-millennial.

      http://www.independent.com.mt/news.asp?newsitemid=151077

      It’s mostly parochial talk, but “bailout rescue” is my pick. Ghal naqra mhux ‘bailout rescue aid’, and yet, it’s nothing of the sort: it is, instead, the act of adding to the debt of a debt-bankrupted nation pushing it into a downward spiral: higher debt servicing, austerity measures, unemployment, lower growth rates, less taxable gains, higher and more widespread taxation, deflation offset by monetary inflation, more unemployment… (Then Draghi saves us. And note: us, not the Greeks, but us European citizens, owned by the EU, played by the ECB)

      ‘We are able to borrow more, nationally, at better rates,’ is what Mifsud is saying.

      ‘And our citizens are not as indebted as in Spain, and the banks are full of dosh,’

      Prosit Mifsud. So I gather our 5-billion-euro national debt can be stretched even further… And it will. Wait till the ESM starts functioning: just another half a billion euros to borrow – il-poplu ghandu, gib ix-xugaman…

  22. Xejn Sew says:

    On a slightly different tack: in a news item entitled “Residents Angry Over Private Car Parks” on the Times website (http://www.timesofmalta.com/articles/view/20120927/local/Residents-angry-over-private-car-parks.438554),

    “Labour candidate Marlene Mizzi, who owns a shop close to the car park, said it was wrong for the Government to refurbish the area using public money and then hand it over to a private contractor.

    “I think we’re really going overboard now,” she said, calling for the area to remain public-owned.”

    According to our Marlene, a star member of Lejber’s Business Forum no less, it is a no no to lease public car parks to the private sector (ie the business sector she supposedly represents), especially when this can mean less custom for her shop.

    Then again, it is perfectly kosher for Marlene to use publicly-funded vehicles and government-paid drivers put at the disposal of her magistrate husband to transport merchandise for her own private business ends.

  23. K.C. says:

    This is what makes us Maltese proud to be Maltese. Why aren’t all people educated? We would not have a Joseph Muscat if we were all graduates!!

  24. Joseph Vassallo says:

    And the Maltese electorate want to gamble all this by voting Labour because of some personal favour that was not granted.

    It is true that the five hundred euro increase was not right but the overall economic situation is good.

  25. anthony says:

    In spite of all the PL scaremongering, the fact is that Malta is a wealthy country.

    98% of national debt is locally owned.

    Maltese people with money have full confidence in their government and happily finance its debt.

    The moment things change we will start on the road to Athens.

    It could happen and quite soon.

    Let us all hope and pray that it will not.

    Not for the sake of the Maltese with money but for that of the Maltese without.

    • Min Weber says:

      Which means we shall no longer be a net recipient of EU funds?!

      • anthony says:

        Exactly, unless there are any fundamental changes in government economic policy.

        As long as we are not constrained to seek a bail-out we will be laughing whether we are net recipients or not.

        Same as we are doing now.

        Let us hope so.

      • Raphael Dingli says:

        Not being a net recepient of EU funds should in fact be an aim and an aspiration. It would prove the econmic competance of the present administration and would bring more and more investment euros to the island. Its called economic self sufficiency and contribute to raising the gdp and hence your standard of living. Think big – and big things happen. Malta could become the envy of Southern Europe. For all their faults the PN is a much better bet than the dsyfunctional alternative – it’s too risky to change course now.

      • Angus Black says:

        Can’t wait for the day when Malta becomes a net contributor because then Malta would be at par (economically) with the best performers within the EU.

        If Labour gets the key to the Treasury, it will be déjà vu all over again and Joseph will be door knocking begging for alms.

        We have to shed the entitlement mentality and stop asking “what’s in it for me”? When we stop thinking that way, we would show a bit of maturity.

    • Jo says:

      Anthony just hoping and praying won’t work wonders.

      We all need to pull our weight and try to persuade even one person who is saying that he/she won’t vote because of something the PN did and which they did not like, to reconsider and for the larger picture and common good and vote Gonzi in again.

  26. Anthony Tas South says:

    Hi Daphne,

    I tried to post the below comment on Franco’s blog under the title GAMBLER GONZI but as usual he only publishes what he likes.

    Yes Gambler Gonzi has brought to our beloved country financial institutions which today are making our lives better, much better I must say. Instead of bringing in factories he brought gaming companies & other financial institution from which today workers like me make over 45k a year.

    Instead of spending weeks or even years grumbling and waiting for an early election so that Joey can make my life better, I decided to work my way through.
    I started as a customer care some 8 years ago and from that day forward I never looked back and that’s what you should have done Franco rather than wanted to become a minister on the basis of being the youngest and that you ousted the likes of Dr.Galea.

    P.S. It’s not the likes of Eddy Privitera who should be posting on this blogg(Franco’s Blogg) as I’m sure that he never has or ever will give you his vote but it was me and my family who voted for you Franco.

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