BusinessToday Previous Editions

9 EDITORIAL BusinessToday is published every Thursday. The newspaper is a MediaToday publication and is distributed to all leading stationers, business and financial institutions and banks. MANAGING EDITOR: SAVIOUR BALZAN EDITOR: PAUL COCKS BusinessToday, MediaToday, Vjal ir-Rihan, San Gwann SGN9016, Malta Newsroom email: bt@mediatoday.com.mt Advertising: afarrugia@mediatoday.com.mt Telephone: 00356 21 382741 R ussia's contribution to the global economy is not huge but its inva- sion of Ukraine has created global economic shock waves at a time of fragile recovery. e Russian economy has been crip- pled by the raft of sanctions imposed by the EU, the US and the UK, apart from other countries. e Russian currency has crashed and major international companies are withdrawing from the country. e immediate global impact of the war and sanctions has been the price of oil. A barrel of crude oil has shot up to $130, a price last experienced in 2008 at the height of the financial crisis. Russia's economy may not be great but it is a major oil and gas producer on which many European states rely on for supplies. e decision EU leaders will be taking later tonight to curb Russian oil and gas imports is likely to cause the biggest economic upheaval for European coun- tries. e prices of energy and fuels are ex- pected to continue rising and will have consequences for European households and businesses. To add to this turmoil, both Ukraine and Russia are major grain and wheat exporters. is will lead to higher prices for staple foods. But another impact is the rising cost of imports by rail from the far east, which would have to find an alternative route rather then pass through Russia. is will mean added costs of transportation. Malta is not immune to these im- pacts, which is why the government has pledged to do 'whatever it takes' to cushion the economic impact of war. A kitty of €200 million earmarked in the last budget as a cushion for rising energy prices at a time when inflation was being driven by post-pandemic re- covery, will not be enough. Finance Minister Clyde Caruana has said that the financial outlay to shield people and businesses from the impact of higher energy prices will be higher than €200 million. Caruana has said that Malta's decision to protect jobs and businesses during the pandemic could not be allowed to go to waste. e government is right in adopting such a strategy although it could exact a heavy toll on public finances given the inability to predict how long the uncer- tainty will last. However, Malta must also re-evaluate its energy strategy in light of these cir- cumstances. An LNG terminal now is making more sense than a gas pipeline because it allows the country to import shipments from different countries. Had Malta been dependent on a gas pipeline now, it risked being hit by an impending gas shortage once the Rus- sian tap is closed. is does not mean that Malta must not invest in a gas pipeline but it is in- cumbent on the EU to look beyond Rus- sia for its energy needs. Now is the time to push for invest- ment in renewable energy such as solar farms and wind turbines but Europe must also have a robust transition plan that involves gas sourced from different countries, LNG terminals and nuclear power stations. Malta must up its efforts to build off- shore floating wind farms and explore a more aggressive approach for public investment in solar energy. It could also look at the potential of investing in a small floating nuclear reactor anchored several miles out at sea. e Ukrainian war has caused western countries and companies to re-evalu- ate their relationship with Russia. On the economic level this presents risks but also opportunities that must be ex- plored judiciously. Risks and opportunities of war 10.3.2022

• Cover