Issue link: https://maltatoday.uberflip.com/i/1496720
maltatoday | SUNDAY • 9 APRIL 2023 10 OPINION Will Malta end up having to go 'nuclear'? RECENTLY, The Times carried a rather strange article under the heading: "Renewable ener- gy 'needed soon' to prevent in- crease in prices". Not, mind you, that there was anything particularly 'strange' about how it was written. Ac- tually, I thought Mark Zammit Lawrence did quite a decent job of synthesizing all the infor- mation – from here and from there – and then hammering it all together into a logical, co- herent whole. It's just that... well, the in- formation it contains doesn't seem to make much sense, that's all. So let's take a closer look, shall we? The very first thing we are told is that: "Businesses and families risk getting hit with high energy prices if Malta does not increase its sources of renewable energy soon, and the EU forces the government to end blanket subsidies on con- sumption next year..." Almost immediately, then, we are faced with a slight am- biguity. Anyone reading that sentence, stripped of any real context, would be forgiven for thinking one of two things. The first is that there must be some kind of 'correlation' between Malta's international obligations to 'increase its re- newable energy sector'; and the pressure that the government is undeniably under – from the EU (and in particular, the IMF) – to 'end its subsidies in the en- ergy sector'. In other words: unless Malta somehow 'increases its sourc- es of renewable energy' – and fast, too! - the EU will 'force the government to end its en- ergy subsidies'... and naturally, this would result in the price of energy dramatically shooting up (as it has everywhere else in Europe). But that, of course, is patent- ly ridiculous. The reality is that the EU is pressuring Mal- ta to remove those subsidies, regardless of whether we 'in- crease our levels of renewable energy', or not. In fact, it has nothing whatsoever to do with 'renewables', at all... but plenty to do with (as the article itself goes on to explain) the Maas- tricht Criteria, and the EU's Growth and Stability Pact. Simply put: Malta is com- pelled by European law to keep its deficit to within 3% of its GDP... or else, face 'excessive deficit procedures'. As such, the only actual concern ex- pressed by the IMF, was to the effect that: "Malta is spending more than €400m annually in subsidies to cushion the cost of energy. That is pushing the national deficit beyond the EU- set limit." But, well, this is where the 'strangeness' starts to set in. For just a little further down the same article, we are al- so told that: "This year alone the government is expected to spend around €400 million to subsidise energy and food pric- es, in a bid to save businesses and keep the economy growing as it recovers from the pan- demic." And, more significantly, that: "It appears the strategy is working. In a credit rating re- port released last week, Fitch confirmed Malta's A+ score, saying the economy was stable and growing, and the coun- try was managing to REDUCE PUBLIC DEBT.' [my emphasis] Got that, folks? It turns out that – despite spending 400 million a year on energy and food subsidies – Malta has somehow managed to not on- ly 'keep its deficit to within the 3% limit, set by the EU'... but it actually 'grew its economy', while simultaneously also 're- ducing its debt'. So can anyone explain to me WHY, exactly, we are even under so much 'pressure' to remove those subsidies, in the first place? And what is so very 'objectionable', about a gov- ernment choosing to spend 400 million a year, to 'save local businesses'... at a time when Malta can very clearly afford this measure (as attest- ed by its continued economic growth): and especially, when – for a change – we're not even in breach of the EU's dratted Maastricht Criteria, to begin with? Like I said earlier: it doesn't make very much sense, does it? It is almost though the EU – and especially, the IMF – is trying to force Malta into re- moving a highly successful (and hugely necessary) social- ly-conscious measure... for no particular reason, under the sun. [Unless, of course, you in- clude the argument that such subsidies are, by definition, 'unsustainable'... in which case: it should really be up to us – as the taxpayers who are fund- ing (and benefitting from) this particular initiative – to decide when, and under what circum- stances, to eventually put a stop to it. Just saying...) But tell you what: let's leave that observation dangling there, for now... and get back to the 'renewable energy' part. While all this has been quiet- ly chugging away in the back- ground: Malta is also under in- tense pressure – independently of the subsidies issue, this time – to 'increase its renewable en- ergy sources', in order to meet all its international targets of becoming 'fully carbon neutral, by 2050'. And this brings us to the sec- ond (intended, this time) in- terpretation: i.e., that Malta happens to be under pressure to remove its energy subsidies,