Friday, 30 December 2005

Something Unreal

The Malta Independent - Friday Wisdom

As we seem well set to consign 2005 to history and fill our hearts with hope that 2006 will be materially and morally better, I cannot disguise an inner feeling that we are living an unreal situation which sooner or later will snap back into reality with unpleasant consequences.

Is it sustainable that we have come to a situation where earnings from labour are fiscally more oppressed than earnings from capital? Have we moved away so much from yesterday’s political battle cry of the left “Repubblika mibnija fuq ix-xoghol” (a republic built on work) to the current reality of a republic built on capital gains from property trading (or speculation, if you will), equity trading on the Malta Stock Exchange or outright gaming and gambling.

Is it sustainable to render speculation through one’s capital, assisted by uncontrolled asset price inflation, more rewarding than earnings through one’s production? What role does Malta’s political left have to defend labour’s share of the spoils, both that measured by statistical Gross Domestic Product and Gross National Income, as well as the much larger cake that includes the increase in overall wealth through asset price inflation, ie through higher real estate and quoted equity prices?

Following its defeat at the polls in 1987,
Malta’s political left never really recovered to find a new role in a drastically changed environment. The first term in opposition between 1987 and 1992 was generally lost time. The left believed that it was still the natural choice of the people to govern and the narrow defeat of 1987 was a short breather to prove the efficacy of our democracy and that Labour needed to do pretty little but wait for 1992 to be re-awarded its natural right to govern.

The crushing defeat of 1992 was a refreshing wake-up call, which brought substantial change in the Left’s positioning on the Maltese political spectrum, distancing itself from extreme intervention policies and moving the party to occupy the middle stream of Maltese society. Labour recognised that having succeeded in giving individuals the right to a high level of education, it could not expect those individuals to deny the right to choose their own lifestyle within the economic capacity that they had succeeded in generating. It endorsed policies for the liberalisation of trade, broadcasting, education and the movement of capital, among others.

These policies impressed where it mattered and by 1996 a new-look Labour was back in power. But it was a false dawn.

It soon became clear that while the electorate was in its majority impressed by promise of new Labour, on the inside nothing was being done to keep the old Labour on board to preserve a majority in Parliament. Without such a majority Labour crashed out of government before it had had time to leave its mark and has since been running in the wilderness trying to find a raison d’ĂȘtre for its existence.

Two election defeats following the loss of the parliamentary majority have not been enough to deliver the obvious message to Labour’s leader that he is Labour’s problem and cannot therefore be part of Labour’s solution.

What is so damned clear to the vast majority of the Maltese seems to get so obscure when it enters Labour’s glasshouse. When I tried to do something about it soon after the election, many told me I was rash and it was too early. Now that we are well past the mid-term point in this legislature the same people complain that it is too late to do anything about it. For Labour it seems it is never the right time to do what is right.

Or is it that their overstay in opposition has rendered Labour afraid to win back government, just as slaves were afraid to redeem themselves to the responsibilities of freedom?

And because Labour has chosen, or been forced to choose, to continue to be led by the same leader who showed an utter lack of leadership qualities when tasked with the responsibility of government, as a nation we are forced to live the unreal situation where we pretend we can live off the easy buck rather than the earned lira.

It is just not real to live in a country where the large majority are eager to demand a change of political leadership through the ballot box at the first real opportunity but will not do so when the alternative is Sant.

His inability to preserve a parliamentary majority is a sign of failed leadership further underlined by his taking the party to a second election defeat by capriciously and unnecessarily conditioning his bid for government to non-EU membership.

His seeking re-election to party leadership in spite of such an awful record, when it is well known that leaders are expected to leave and not be thrown out through the ballot box, further erodes his credentials for national leadership.

This is evident in the emerging trend of election results. Whenever the electorate is asked to choose between Labour and PN where Dr Sant’s return to the premiership is not in the equation, Labour tends to win handsomely (as local and European Parliament elections bear witness).

But in general elections where a PN loss would bring Dr Sant back as prime minister, the PN win by Labour’s default. It has happened twice and could happen yet again. Is it real to contemplate 26 years, bar two, of continuous PN government?

Luck seems to be on the PN’s side as well. How else can one explain the reward Malta received from the EU budget perspectives 2007-2013 where, because of our lacklustre economic performance, we statistically stayed just within the norm for full objective one funding, whereas Cyprus have had to pay the price of their economic success by soon becoming net contributors to the EU budget?

Is it real to expect that we can continue to enjoy the fruits of our inefficiencies? I am confused as to whether to wish that we can continue to dream on or whether to hope for a salutary encounter with reality in 2006. Take your pick of what is best for a Happy New Year.

Friday, 23 December 2005

Santa In and Out Season

The Malta Independent - Friday Wisdom

For children, Santa will come tomorrow night, down the chimney, on a flying sledge or by whatever means children’s fancy will allow, provided that he trades milk and biscuits for a sack full of gifts.

This is normal. What is not normal is that many who are well past the age of expecting goodies from Santa are apparently expecting him to revisit in January with a sack full of cash.

Investors in local equities, especially those holding share positions in the three quoted banks, seem to believe in Father Christmas even out of season. Just have a look at Table 1 to get a glimpse why I am saying this.
Table 1

Bank of Valletta
HSBC Bank Malta
Lombard Bank
Share Price 20.12.05
Lm 7.35
Lm 7.33
Share Price 30.09.05
Share Price 30.06.05
Share Price 31.12.04
Share Price 31.12.03
Increase since 30.09.05
Increase since 30.06.05
Increase since 31.12.04
Increase since 31.12.03
Price/earnings ratios*

*share price as a multiple of historical earnings per share

Over the last two years, the share price of HSBC has increased by 199 per cent, BOV by 168 per cent and Lombard by 96 per cent. This is apart from substantial dividend income pocketed by shareholders. It could give an indication as to why, in spite of poor economic performance at production level, the feel good factor is better than it ought to be. This asset price explosion in popular equities, added to another sizeable price explosion in real estate values, is making people feel richer not from their toils but from their unearned riches through their investments.

It is not the scope of this column to express firm opinions about proper or improper valuations on the equity market. But there are two aspects which emerge from these figures which deserve highlighting.

Firstly, local bank share prices are trading at very stretched multiples of price earnings in comparison with share prices of top class international banks. Compare HSBC Malta price earnings of 24 and Bank of Valletta price earnings of 23 to the following records of a selected range of prime international banks. (Table 2)

 Table 2
Halifax Bank of Scotland
HSBC (parent)
Societe Generale
Bank of Ireland

Source: own research

For the non-technical, this means that while European banks are trading on share prices that are on average 11.44 their estimate 2005 earnings per share, Malta’s two main banks are trading at multiples twice as big, suggesting that the share price of local banks could be twice as aggressive as those of most European banks.

It should be made clear that the price earnings ratio is not the sole criterion on which equity valuation ought to be judged. Equally important is the growth trend and the robustness of such earnings. Indeed one could possibly accept a more aggressive valuation for local bank equities on the basis that the profit growth in 2005 was superior to their peers in

But looking forward, one ought to question whether it is realistic to discount in equity values even more aggressive profitability growth when banks stand to lose a major source of exchange earnings once
Malta joins the Euro in 2008. Are investors considering that with the euro as our domestic currency, competition in the banking sector could increase once the barrier of having a Malta lira deposit base to keep out cross-border competition disappears?

The other point which deserves comment is the fact that since September 2005 the equity price of Bank of Valletta has travelled twice as fast as HSBC Malta and six times as fast as

My concern is that a good portion of this out-performance is based on wrong perceptions of what really is involved in the bonus one for one share issue announced by the bank and due to take effect on 18 January. My feeling, from direct interviews with local retail investors, is that many are perceiving this as a Santa in January, a sort of buy one get one free tal-lira offer.

I think it is the duty of all who have the orderly performance of the financial markets at heart to explain to the public in general that what will happen is that the value of the Bank on 18 January will be spread on twice as many shares in issue the day before. As the underlying global value of the bank will not change, all things being equal, which is rarely the case, the price of Bank of Valletta shares upon issue of the bonus shares should be half that of the day before prior to the bonus issue.

While the reference to bonus issue is technically correct, I am afraid that its use in unsophisticated financial markets without proper and repeated explanations could lead to investors taking decisions on false assumptions.

Investors should keep Santa out of their investment decisions and reserve him for tomorrow night where he belongs in our children’s world.

Friday, 16 December 2005

French Fries and German Sausages

The Malta Independent - Friday Wisdom

I love France, French language is music to my ears, the joie de vivre of the French is admirable at individual level but I find it hard to digest the arrogance of its political class who think of themselves as God’s gift to mankind.

It had to be a French President to admonish the new members of the EU from the former Eastern communist block that they had lost a golden opportunity to remain silent when they showed sympathy with the US position in the run-up to the war against Iraq. I personally never found the US position on Iraq convincing and had great sympathy with the French line of thought. But expecting other sovereign states to agree or remain silent sounds to me as concentrated arrogance.

The Malta government seems to have had a taste of it this week when the French government expressed its concern about Malta’s show of sympathy with the EU Budget 2007-2013 proposal of the UK Presidency. The Malta government was quick to clarify that Malta has not agreed to the budget as proposed but expressed the view that it offers a sound basis for a compromise agreement at the next EU heads of state summit.

Now of all the countries who have a moral right to criticize the British for proposing a budget that does not respond sufficiently to the financial needs of new members states, the French ought to be the last. Because the reason why the British will not budge sufficiently on their rebate to free up funds for meeting the promised financial assistance to new member states is that France would not budge to a review of the subsidies paid from the EU budget to its rich farmers.

Charles Crawford, Britain’s ambassador to Poland, last week described EU farm subsidies as “the most stupid, immoral, state-subsidized policy in human history, give and take communism; EU farm subsidies bloat rich French landowners, pump up food prices and create poverty in Africa.” He could not have said it better in two sentences.

Diplomatic niceties apart, when the EU heads of states meet this week our sympathy should be for the British who in recent weeks has moved from a rigid untouchable rebate position unless the farm subsidies are also put on the negotiation table. Britain has now offered partial dilution of its rebate and is expected to make further concessions in this regard during the summit in a last ditch effort to show some fruits from its term of presidency of the EU.

So whilst putting pressure on the British government to make further concessions to avoid a dangerous stalemate, especially now that Britain is comparatively much richer than it was in 1984 when Thatcher extracted the rebate deal in the Bruges summit, equal pressure should be put on France to accept a 2008 revision of the farm subsidy system.

The 2008 time-line is meant to ease for French political system the pain of the withdrawal symptoms from the EU gravy train. By 2008 Chirac would be political history and a new French president with a fresh mandate could be less sensitive to selfish domestic policies in reaching a compromise to accelerate the reduction of EU farm subsidies in line with what almost everybody else considers fair and reasonable.

Acceptance of the 2008 farm subsidies revision at the EU summit is also crucially important if the Doha round of the World Trade Organization, meeting next week in Hong Kong, is not to flounder crushing the aspirations of alleviating poverty in Africa by opening western markets for their agricultural produce and by not competing with them unfairly on other international markets through price dumping of EU subsidized produce. Failure of the WTO Doha round will render meaningless all millennium exhortations to reduce poverty by 2015 and could give rise to resentment against the rich west which eventually will show itself in different unpleasant forms, including illegal immigration and terrorism.

Much will depend on Angela Merkel who is to have her baptism of fire at the EU summit following her succession to Gerhard Schroeder as German Chancellor. French intransigence cannot be broken by British flexibility alone. Schroeder somehow always toed the French line in prematurely committing himself not to question EU farm subsidies during the budget cycle 2007-2013. Merkel need not feel committed to her predecessor’s assured backing for the French position and without the support of Germany it is France who could be isolated at the next summit rather Britain. After all, new EU countries desperately need a budget agreement even f it is does not fulfill all their aspirations whilst Britain and France will not be hurt, beyond the political pride of their incumbent leaders, by failure to reach a budget compromise.

If Merkel plays her cards right she could broker a reasonable compromise for the EU budget, keep the door open for a successful outcome at the Hong Kong meeting of the WTO Doha round next week, and establish her credentials as a woman of substance on the international scene.

The next few days will decide whether 2005 was a wasted or fruitful year in international politics and much will depend on the clash of French fries and German sausages.

Sunday, 11 December 2005

Super Crasher

The MaltaIndependent on Sunday

I had clearly pointed out the risk to public morality of privatising the hitherto public lotto without taking precautions not to expose the general public, with an inherent Mediterranean cultural inclination for gambling, to an excessive temptation to spend a disproportionate part of disposal income on such human frivolities.

Writing in this newspaper on 4th November 2001 I had asked:

what precautions are being taken to ensure that we do not end up with a gaming terminal in every street corner augmenting gaming and gambling far beyond the broad economic growth rate? Has the government calculated the social cost that a sudden surge in gaming would cause through forced recourse to usury and other criminal practices? Has anyone made any calculation of the economic costs of such sudden surge in gaming as expenditure gets shifted from other consumption with much more economically effective multiplier effect?”

Now we seem to have landed exactly where I had feared we would land. Ask anybody around you and he or she will tell of first hand experience of people who hardly earn enough to keep their body and soul together who are scrounging to somehow live in the false hope of hitting the big super five jackpot.

We spend a handful in protecting our kids from vices such as drug and alcohol abuse. Our moral authorities, the Church included, do sterling work to educate the exposed sectors about the stark consequences of experimenting with core drugs and or their modern synthetic derivatives. Admirable people, to whom we shall remain eternally in debt, like those at Caritas, Appogg and similar organisations, dedicate their lives to redeem and rehabilitate those fragile amongst us who give in to the temptation to seek refuge in drugs or alcohol.

Even the State and the Public Sector spend a handful in supporting these NGO’s through budgetary allocations, sponsorships or outright donations and in running a centre to give controlled drugs or methadone alternatives to those undergoing a rehabilitation programme involving a controlled withdrawal.

It is therefore quite paradoxical that gambling is not only legalised in controlled environments like Casinos, but that we have opened it up to full exposure in practically every street of every town or village. We must be working on the false assumption that exposure to the abuse of gambling is morally less damaging then exposure to the abuse of drugs or alcohol.

I am surprised that Church Authorities, who regularly find an opportunity to warn us of the great moral pain which would befall this country if we were ever start to consider giving up the privilege of being one of the only two countries in the world that outlaws divorce, has not expressed any reservation about the great destruction to family values being incurred by the undue exposure to gambling (gaming if you wish to be more polite) by overblown jackpot prizes which exploit human weakness to resist being drawn the quick rich route which inevitably leads to financial and moral devastation.

Even our commercial community is being severely hit as retailers (and eventually wholesalers, importers or manufacturers further up in the delivery chain) complain that when the Super Five prize reaches jackpot proportions a significant portion of the disposable income normally spent on ordinary consumption, gets deflected to frivolous gambling. A butcher shop confided to me that sale of meat in a Super Five jackpot week falls dramatically as presumably the reduced disposable income following the spend on the get rich quick illusion forces housewife to feed their families on pasta with plain butter or hobz biz-zejt.

I think it is time for the authorities to take a fresh hard look at the situation before more damage is caused to family values which ultimately hurts society at large. As a simple first step the authorities should direct that the jackpot should once more be subject to a reasonable maximum figure and that any excess is shared by allocating 50% for future prizes in subsequent weeks and 50% to be donated to recognised NGO’s who perform valuable social work on a non-profit basis.

Secondly the authorities need to control the spread of gambling/gaming channels to avoid seeing gaming machines in coffee shops or other large retailers which should be kept clear of gambling terminals. Gambling terminals should only be allowed in recognised offices like lotto offices where the gambler goes purposely to gamble. There should not be a mix of gambling with anything else imaginable.

Thirdly gambling of amounts beyond a certain limit should be made subject to more formal procedures. In the financial services sector we are expected to keep documentary evidence of identity with anyone we do business with even in the most ordinary course of business and we are expected to have a long nose to smell that we do not handle any money which could have been sourced from criminal activities. How can it be that people authorised to accept lotto/super five stakes are not obliged to keep identity records of people staking above a certain limit let alone satisfying themselves of the clean source of the funds being staked?

As this is my last contribution before Christmas may I wish my readers a very happy and peaceful Christmas with a bit of advice to stake on Super Five no more than is necessary just to have a tip of the toe in the pot and to save some money for donating to more worthy causes like L-Istrina and especially RTK campaign for Dar tal-Providenza to be held between 30th December 2005 and 1st January 2006. Certainly no cause could be more worthy than id-Dar tal-Providenza and its little angels. 

Friday, 9 December 2005

Forgotten Message

The Malta Independent - Friday Wisdom

I well remember the successful strategy adopted by Labour during the first term of Alfred Sant as Leader of the Opposition between 1992 – 1996. It was a strategy of non-confrontation to the execution of government’s policy. Instead it focused all scarce resources on building incrementally alternative policies, which would, in the fullness of time, come next election, persuade the majority to back a New Labour government.

This strategy had two advantages. Firstly it allowed government to carry on with its work, in the process making many mistakes, like introducing VAT in the year before the election rather than in the year following the election, without having anyone else to blame for its failings. Secondly it gave the PN government a false sense of security and over-confidence thinking it had a weak opposition that could be taken for granted.

Little did government then realise that the non-confrontational style of Labour’s opposition 1992-1996 was allowing it to build its internal structures ( the New Head Quarters, electoral research and capillary planning to get out the vote on street by street basis) which together with its fresh look and no-nonsense policies offered a better alternative to a fatigued government which had executed the two full terms normally accorded by the electorate before desiring a change at the helm of the country.

It worked. Labour’s 1996 election victory went beyond our wildest dreams and the PN’s worst nightmares. The problem is that Labour has forgotten the message. Rather than build on the successful strategy of 1992- 1996 Labour is somehow gripped by the failed policy of negativism it adopted between 1998-2003.

This is hard to understand or explain. Take the Sea Malta affair as an example. Criticising the government for the lack of transparency in the privatisation process and for not getting the best value for a national asset is certainly an obligation of the opposition, which if done properly and effectively would be appreciated by the public at large.

Nobody gives government much credit for its knack to soot rather than burnish its own assets in the process of privatisation. This has happened again in the Sea Malta process when the responsible Minister publicly stated that he does not agree that the market value of a vessel could go up rather than down, thinking that a commercial vessel is like a private car the value of which depreciates every year.

The business world teaches that the market value of most assets used to generate revenues largely depends on the magnitude of revenues they can generate and that it is quite normal for ship values to increase if the freight rates go up due to shortage in shipping capacity caused by increasing international trade.

However, stating that when and if re-elected a Labour government would create another Sea Malta does pretty little to gain the confidence of that sector of the electorate that is tired of the PN but is not persuaded that Labour can offer better.

The world is moving towards leaner and meaner governments whose primary role is to ensure proper regulation for the conduct of fair and competitive business and whose prime function is the creation of a fiscal, regulatory and economic environment that stimulates and attracts private productive investments. Government’s creating new enterprises to compete as an operator with private businesses does not sit well in the globalisation model we have no option but to embrace. Taxpayers unavoidably interpret such policies as an attempt to protect inefficient work practices that can only survive at the taxpayers’ expense.

In this case its ‘privileged’ GWU partner is not helping Labour’s tarnished image. Admittedly the GWU has been caught between a rock and a hard place when the sea faring employees, enjoying the benefits of uncompetitive work practices that the new owners want to eject, would not budge their non-consent in spite of the overall majority of employees being in favour of the new arrangements. In such a case when it is impossible to find a compromise pleasing everybody it is obvious that the will of the majority has to prevail. In trying to find an impossible compromise satisfying all sides the GWU finished pleasing no one and played into the hands of the new owners who are now getting a carte blanche to start a new operations picking and choosing employees on their set terms rather than taking on the whole Sea Malta operation as a going concern respecting the seniority benefits of employees.

In all this there is one sure winner - the PN government. The avoidable confrontation about Sea Malta has buried the public perception of the hefty increases in utility rates, which have disappeared from the headlines in less than a week in spite of their harsh effects on consumers. When Labour announced analogous utility increases in November 1997 the PN and its friendly media kept the issue alive right until the election of September 1998 depicting Labour government as cruel and without a social conscience. What a difference in media management!

An awful budget for 2006 that fails to deliver what is most needed, economic growth, passes almost as a non-event and without any liability to the government’s and the PM’s personal popularity which according to recent surveys published in the media are still superior to both MLP and the Leader of the Opposition respectively. The Sea Malta affair has provided the government with a unique opportunity to deviate attention from issues that could cause it a liability and to the depict Labour and the GWU as the best reason to stick to the PN warts and all.

Labour should not forget the policies of success of 1992-1996 rather than cling to the policies of failure of 1998-2003. The price of forgetting would be prohibitive not only for Labour but also for Malta who desperately needs a credible alternative to a fatigued PN government.

Friday, 2 December 2005

Back to the Jungle

The Malta Independent - Friday Wisdom

It took no more than 24 hours from the end of the Malta CHOGM to receive a rude awakening from the illusion and the “make-up” we put on for our distinguished visitors. We are still in the jungle of shoddy service from public entities which is not even up to third world standards.

Monday evening, while having dinner with my family, a power outage forced us to continue in unromantic candle-light. A glimpse outside provided the dubious comfort that our problem was shared with most neighbours and the consolation that given the spread of the problem somebody must have alerted Enemalta to it.

Darkness forced an early night but during the night, I started getting concerned that power was not restored. For several times I tried to contact Enemalta by phone to check if they could provide any information on the progress of the repair job. To no avail! All attempts simply went unanswered.

When finally on Tuesday morning the switchboard was manned again, the operator assured me that the corporation was fully-aware of the problem and that we should have power restored by about
10 o’clock that same morning. By 11.30 power was still down and on contacting the corporation they now informed that it would be late afternoon before we could have service again.

When I complained that 20 hours to repair a very localised fault was very poor service, the operator tried to put me through to Enemalta’s customer service office. Each time after several unanswered ring tones I was switched back to the operator, who after the third unsuccessful attempt cordially requested me to contact them directly, giving me their number. Several unsuccessful attempts forced me to resign and wait patiently for the power to be restored at the corporation’s leisurely pace which eventually they did around
five o’clock Tuesday afternoon – more then 20 hours after the fault occurred.

Now I can understand that faults do happen and when they happen, certain discomfort is quite unavoidable. But 20 hours for a very localised fault is way, way below the minimum standard of service that consumers have a right to expect. What is worse is that the corporation seems to make no effort, for all the over-manning which it carries at our expense, to keep consumers informed to ease pain when faults do occur.

I ended my article last week stating that “Investment is attracted by reliable marathon runners rather than excellent but moody sprinters, who tend to relax unduly between one sprint and another.” It took less than 24 hours after the CHOGM sprint to fall back to our jungle mentality.

The “back-to-the-jungle” feeling is also reinforced by the industrial action brewing between the GWU and all the rest. The GWU certainly has a habit of exposing itself to criticism that it can do little else than protest and in the process compound the problem which gave rise to the protest in the first place.

But it would be unfair to put all the blame in the GWU’s court. The problems we have can only be solved if we all accept the need to lower our standard of living to adjust to the reality that our economy has lost its growth momentum because it has lost its international competitiveness. These problems were fathered by the same administration that is pretending that it has the will, determination and ability to solve them by putting most of the adjustment pain on consumers in general and private sector employees in particular.

The simple truth that needs to be understood and accepted by one and all is that the problems can only be solved by a national effort which causes substantial adjustment pain and that in the name of social equity this pain has to be spread fairly across all sectors.

The problem is that the government has poor credentials to broker such a national agreement as it gained our democratic mandate to govern after it categorically and falsely assured us that public finances were in good shape and that our joining the EU would magically produce strong investment inflows and steady economic growth. Where in the government’s manifesto were we promised higher VAT rates, higher utility rates (which at least are partly needed for reasons other than oil price hikes) and payment for “free” health service which is clearly on the cards?

A new administration free from the guilt of commission for the economic problems we have and from the sins of misrepresentation in order to secure our electoral mandate would have a much better chance of brokering such badly-needed national agreement.

EU negotiations coming up regarding the budget for 2007-2012 also gives a sense of going back to the jungle. The French feel that their agricultural subsidies from the EU budget should be untouchable for the duration of the budget, postponing to 2013 the possible removal of such subsidies which apart from absorbing half the EU budget also create problems for the poorer countries who are clamouring for their removal at the Doha round of the WTO due to meet in Hong Kong later this month.

The British argue that unless the agricultural subsidies are revisited during the next budget period, their rebate from the EU budget is untouchable as the rebate is meant to claw back the disproportionate load carried by
UK to fund agricultural subsidies that favour the French.

So once the giants will not budge from their vested positions, the law of the jungle is made to apply by cutting the budget for the minnows. The new entrants,
Malta included, are being presented with Hobson’s choice of having no budget or a reduced budget from what was previously promised to them by way of structural funds meant to help their speedy integration within EU economic structures.
Malta will fare worse than most. Whereas new East European EU members can boast of higher FDI flows, which in some way compensate for the lower EU funding now being proposed, Malta has no such FDI flows to compensate the cut it has to accept.

I am already missing the CHOGM dream.