Malta sharply divided on the merits of EU membership as talks begin

Unperforated toilet-paper, matches that did not light and chocolate containing foreign bodies

Unperforated toilet-paper, matches that did not light and chocolate containing foreign bodies. Prof Lino Briguglio mentions these things when asked whether Malta should enter the European Union.

Not so long ago such products were on sale in this small Mediterranean island, he explains, and because of the protected economy there was no choice available. "We were told that the chocolate was like that because it was so fresh and that you wouldn't find such things in Cadbury's. Businesses took advantage of the captive market," he says, smiling at the memory.

The economy has come a long way since it opened up in 1987 following a change of government after 16 years of the Malta Labour Party (MLP). Now it has reached a stage where it is ready for the EU, said the professor of economics at the University of Malta. However, there are many who disagree with him. They think nostalgically of the days when they bought their bar of Cadbury's on the black market, and fear what membership of this European club would bring.

Malta may be the best placed in the queue to join among the so-called "second wave" of candidate countries but, ironically, it is where the application is causing most contention.

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This is a place where people take their politics very seriously (turnouts of well over 90 per cent in general elections) and debate is robust. The governing Nationalist Party is pushing the application but the Labour Party is strongly against.

Even by Maltese standards recent weeks have been exceptional. The EU flag was burnt by someone wearing a mask. The leader of the MLP, Dr Alfred Sant, said a Labour government would not feel bound by the results of a referendum on EU membership.

The EU Commissioner for Enlargement, Mr Gunter Verheugen, who advocated that the European socialists should encourage the MLP to change its position, also came in for a lashing when Dr Sant said he should bite his tongue or have it bitten for him.

The EU issue makes headlines every day and tension was heightened by the impending visit of the President of the European Commission, Mr Romano Prodi, and Mr Verheugen earlier this month.

The Maltese Prime Minister, Mr Eddie Fenech-Adami, seems unperturbed: "It's characteristically Maltese, an indication of how we feel about politics," he told The Irish Times. Along with Malta, five other countries are seeking EU entry - Latvia, Lithuania, Slovakia, Romania and Bulgaria - following agreement by EU governments in December to double the number of countries negotiating membership. Malta was originally paired with Cyprus, and its membership application was renewed after the MLP suspended it when it was in power from 1996 to 1998.

Malta has had an association agreement with the EU since 1970 and 70 per cent of its exports are to EU countries, with a similar figure for imports. With a population of 370,000, which would make it the smallest EU nation, the country has being going through a rough patch in the last few years, but the economy is showing signs of recovery. At just over 5 per cent, unemployment may seem low but to a people used to having it hovering around 3 per cent it is a worrying figure.

It is the overhauling of public finances which poses the biggest challenge for the government. Mr Fenech-Adami says the budget deficit, which hit 11 per cent of GDP in 1998, was on the way to being brought down to 3 per cent by 2004. VAT, abolished during MLP government, has been reintroduced and the prime minister says a plan has been introduced to crack down on "rampant" tax evasion.

One of Malta's strengths is the tourism industry. It directly employs 19,000 people and accounts for 24 per cent of GDP. Last year 1.2 million people visited and even in this there are strong EU links, with the vast majority coming from EU member-states.

But it is visitors of a different kind that are taxing the minds of the Maltese at present. They fear that EU membership would result in a huge influx of people willing to work for less money. They are concerned that their tiny nation would be swallowed up if they join and there are worries about the survival of native industry.

For many Irish people Malta is simply a destination for a package holiday, but in the midst of this debate Ireland is being held up as an example of what great things EU membership could bring. The similarities between the two countries are highlighted - Malta was colonised by the British, becoming a republic in 1974; it is an island nation on the periphery of Europe; the majority of the population is Catholic.

However, Dr Sant, who is calling for a free trade zone, is not so impressed with the comparison. In the Maltese parliament this month he said that in Ireland for the first 20 years of its membership, unemployment topped 15 per cent. US investment in Ireland was due to American-Irish connections and not to EU membership.

Mr Fenech-Adami has been leader of his party for over 22 years and last year suffered a serious illness, prompting talk of his standing down. However, he says he hopes to be in office to see the membership referendum through in mid or late 2002.

There are years of discussion left for the Maltese before any EU accession. However, Dr Simon Busuttil, head of the recently established Malta-EU Information Centre, says what is going on at the moment is a good example to be observed.

"In Poland the Yes campaign is coming down gradually and in Latvia the No campaign is gaining ground. The EU needs to sell enlargement. Candidate countries cannot be taken for granted," he advises.