Issue link: https://maltatoday.uberflip.com/i/1544495
THERE is no doubt that the Central Bank of Malta has truly established itself as a research and publication powerhouse. Since the beginning of the year, members of staff have issued various analyses covering cost pressures, wages, food infla- tion, and poverty and social in- clusion. Taken individually, each of the recent Central Bank analyses offers a clear and well-structured insight into a specific aspect of Malta's economy. But when read to- gether, a far more powerful and nuanced story emerges. It is a story of an economy that has grown rapidly, adapted to successive shocks, and deliv- ered real gains, yet one that is simultaneously operating un- der structural tension. At its core, the common thread running through all these reports is simple but profound. Malta has transi- tioned from a period of shock to a period of persistence. The crisis phase has passed, but the after-effects have not. What was once temporary has, in many ways, become structural. External shocks The starting point of this story is global. Since 2023, Maltese firms have been op- erating in an environment shaped by successive external shocks—from the pandem- ic aftermath to geopolitical disruptions because of war and energy volatility. Supply chains were disrupted, ship- ping routes lengthened, and input costs surged. As high- lighted in the Central Bank's analyses, nearly three quar- ters of firms reported rising input costs at the peak of this period, reflecting how deeply global dynamics filtered into the domestic economy. Yet what is particularly strik- ing is not just the scale of these shocks, but how they evolved. By 2024 and into 2025, the intensity of cost pressures be- gan to moderate. Fewer firms reported significant increases, and more described cost rises as "slight". But this easing did not imply a return to previ- ous conditions. Costs did not fall back. They stabilised at a higher level. What emerged is what the report rightly calls a "new normal", where elevated 18 maltatoday | SUNDAY • 19 APRIL 2026 Economist JP Fabri OPINION When Malta stood still; neutralised in thought and action Retired colonel and former deputy commander Armed Forces of Malta David P. Attard AT a time when the European Union is moving to confront one of the fast- est-growing security threats in the shape of malicious drones, Malta has yet to show a clear or coordinated response. There has been little visible public dis- cussion, no policy direction at the highest levels and no real sense of urgency. On 11 February 2026, the European Commission published its Action Plan on Drone and Counter-Drone Security, setting out how Member States should detect, track and where necessary, neu- tralise hostile drones. Across Europe, the message is clear. This threat is no longer theoretical. It is already here. However, in Malta the ac- tion plan has barely registered in public debate. Yet, the risk is neither distant nor ab- stract. The central Mediterranean is al- ready seeing drone-related attacks that, until recently, would have been unthink- able. Reports involving malicious drone activity targeting motor vessels and tank- ers in Malta's backyard should have trig- gered far greater scrutiny and a more vis- ible national conversation. They did not. Malta's vulnerability when faced with this threat is structural and significant. This is a country that depends on a nar- row set of critical infrastructure. One in- ternational airport, one main passenger harbour, one primary commercial port, a single power station complex, one major hospital and a limited number of reverse osmosis plants. Add the subsea cables connecting Malta to mainland Europe and the extent of that exposure becomes even clearer. It does not take much to dis- rupt an ecosystem like this. What happens if a drone forces an air- port closure, even temporarily? If port operations are halted at a critical mo- ment? What happens if energy genera- tion or communications infrastructure is targeted, whether deliberately or through reckless use? These are not far-fetched scenarios. They are already being encountered else- where in Europe, where drone incidents have disrupted airports, threatened pub- lic events and exposed gaps in prepar- edness. Addressing such risks requires capabilities that Malta has not visibly prioritised. Across the EU, counter-drone systems designed to detect, track and neutralise hostile drones in real time are fast becoming standard tools for protect- ing critical infrastructure and high-risk environments. In Malta, there is no clear indication of a comprehensive, integrated national counter-drone capability. At European level, support structures already exist. Through the European De- fence Agency, member states are pooling resources, sharing expertise and develop- ing joint capabilities. EU funding instru- ments are backing research, procurement and deployment in this field, allowing even smaller states to access technologies and expertise that would otherwise be out of reach. However, Malta has yet to leverage these opportunities. It remains outside deeper defence cooperation frameworks such as Permanent Structured Coopera- tion (PESCO), where many advanced col- laborative projects are taking shape and where long-term capability development is increasingly being driven. For a small state, that matters. Which is why one step stands out as both practical and necessary. Malta should en- gage more actively in EU counter-drone initiatives and capability programmes not as a political signal, but as a matter of na- tional resilience and basic preparedness. The hesitation may lie in how neutral- ity is conveniently being misinterpreted. Neutrality was never intended to mean passivity. Neutrality does not prevent investment in defensive systems. It does not preclude cooperation with European partners in areas that are clearly defensive in nature. And it does not deter emerging threats. A hostile drone approaching Maltese airspace will not pause to consider con- stitutional principles. It will not distin- guish between neutrality and alignment. It will simply exploit vulnerability where it finds it. If there is a deliberate decision to limit engagement in this area, then it deserves explanation. Because silence, in this con- text, is not neutral. It is consequential. Malta is unlikely to face a conventional military attack. But that is no longer the benchmark that matters. Today's threats are smaller, cheaper, harder to detect and far more likely to appear without warning or clear attribution. Across Europe, governments are act- ing and investing in detection systems, strengthening response capabilities and addressing vulnerabilities before they are exposed. Malta, for now, is not acting with the same clarity or urgency. And when the next drone-related in- cident occurs, the question will not be whether the risk was recognised, but why, having seen it coming, Malta chose to stand still, neutralised in thought and in action. The Delta Company of the Armed Forces of Malta's 1st Regiment carried out a series of Counter- Unmanned Aircraft System training exercises last September but Malta has so far not leveraged EU defence funding and cooperation opportunities and it remains outside PESCO (Photo: AFM/FB) And when the next drone-related incident occurs, the question will not be whether the risk was recognised, but why, having seen it coming, Malta chose to stand still, neutralised in thought and in action