Issue link: https://maltatoday.uberflip.com/i/1282292
9 maltatoday | WEDNESDAY • 26 AUGUST 2020 NEWS MATTHEW VELLA FOREIGN minister Evarist Bar- tolo has shot down speculation that Turkey wants to use an air base in Malta to help its military campaign inside Libya against the GNA rivals. Bartolo told The Financial Times the suggestion was "rubbish". "There has been no such re- quest," he said. "We are a tiny, neutral country — it's in our con- stitution. It's not in our interests and I think it's not in the interests of the Mediterranean for Malta to be used against any neighbouring country." Turkey is militarily allied to the UN-recognised Government of National Accord in Libya, which has been locked in war against Field Marshal Khalifa Haftar and his Libyan National Army. Haftar is backed by Egypt, the UAE, as well as Russian mercenaries and also France. But Turkey's supplies to Libya are now the subject of increased tension in the Eastern Mediter- ranean: Greece and Cyprus want Turkish movements curtailed, and Egypt has joined with Greece in declaring an exclusive econom- ic zone in the region. Additionally, fears that the Med- iterranean could become a con- flict zone increased after France deployed naval vessels and fighter aircraft and Athens. Bartolo urged talks to avert possible escalation after Ankara mounted a new naval expedition to search for gas, while Greece and Cyprus pressed EU allies to impose more sanctions against President Recep Tayyip Erdogan's government. "If they are on very bad terms and there's a lot of hostility, it is going to spill over into the rest of the Mediterranean," Mr Barto- lo told the Financial Times in an interview. "It's in our interests to as much as possible find ways of de-escalating and having dialogue, however difficult it is." Bartolo said he had told Mevlut Cavusoglu, his Turkish counter- part, in July that the 1962 Cuban missile crisis was a good example of face-saving resolution to a dan- gerous stand-off. He added that the EU's "difficult and complicat- ed relationship" with Turkey went beyond the energy disputes and must take account of Ankara's crucial role in curbing migration to the bloc. "If we turn away from each oth- er, I don't think it will be a good development — even for the Eu- ropean Union," Bartolo said. The EU has so far imposed on- ly largely symbolic sanctions over Ankara's energy expeditions in waters off Cyprus. EU foreign ministers will discuss the eastern Mediterranean situation at an informal meeting in Berlin this week, ahead of talks by bloc lead- ers at a summit in Brussels in Sep- tember. France is supporting demands from Greece and Cyprus for a tougher line against Turkey. But other EU member states are re- luctant to undermine the relation- ship with Turkey further, given the country's importance for mi- gration policy, counter-terrorism and trade. France deployed a helicopter carrier, a frigate and two Rafale fighters in the eastern Mediterra- nean this month. Bartolo instead praised Germany's moderating in- fluence. "I think that whatever step we need to take it's important that it doesn't lead to a vicious circle. I appreciated a lot what Germany is doing. I think that Germany is a great stabiliser, moderator, talking to different countries, keeping an open channel of communication. I think that is crucial to do that." Bartolo rubbishes claim of Turkey seeking Malta air base for Libyan campaign Turkish Minister of Defense Hulusi Akar (left) with Evarist Bartolo THE economy will contract by 6.6% this year but is expected to grow by 6.1% in 2021, the Central Bank of Malta said in its latest projections. Weak tourism exports and low domestic demand caused by the COVID-19 pan- demic are behind the projected decline in Malta's GDP. The CBM said the situation was made worse by increased uncertainty and dis- ruptions to the global supply chain. Accommodation and food services ac- tivities, transportation and storage, and wholesale and retail trade sectors, are forecast to be the worst affected. However, domestic demand might pro- vide the economy with a needed boost throughout 2021 and 2022 as economic activity stabilises. Employment is expected to decline in 2020, but active labour market policies and fiscal measures are expected to soften the losses. The expected improvement in economic activity will further allow the labour market to rebound in the coming years. Downward pressures from domestic and international prices should lead to a drop in annual inflation from 1.5% to 0.9%. but cost-push factors arising from global supply chain disruptions will push inflation back up to 1.4% by 2022 and help keep prices balanced. More severe COVID scenario The Central Bank of Malta made further projections for a more severe COVID-19 scenario, which could see GDP contract to a further 9.3%, remaining below 2019 levels at the end of 2022. The government deficit would rise to 11.3% of GDP in 2020, with the govern- ment debt-to-GDP ratio rising above the Stability and Growth Pact benchmark at 66%. Unemployment would also see a fur- ther rise, with inflation slightly weaker. Central Bank of Malta expects economy to contract by 6.6% this year as COVID-19 takes its toll