The 6th South EU Summit (also referred to as Southern EU Countries Summit), which was hosted in Malta’s capital city of Valletta, comes with Europe and the core principles of the continental union at a historic crossroads. Premiers from France, Italy, Spain, Portugal, Greece, Cyprus, and the hosting nation, Malta, gathered to pick up from where the last summit in January left off, with talks focusing on the major issues currently facing the bloc – chief among them being climate change, migration, and bolstering the EU in the face of the results of the recent European Parliament elections – and mere days prior to the EU Council meeting, where a number of top jobs are opening up in key European Union institutions.
While the South EU Summit provides an opportunity to reflect on Europe’s fractured political landscape, Maltese Prime Minister Joseph Muscat points out that the basis of the summit is to generate innovative solutions, both for the region and the continent as a whole. “Now I think [the Summit] has become a standard fixture that in itself will earn more gravitas and will become stronger within the European Union (…). We don’t think of ourselves as some sort of exclusive club that will say things amongst ourselves. Rather, we see ourselves not as part of a group of seven, but as part of a group of 28 or 27, and I think that’s our big strength.”
Planning the Future of the Union
The five senior EU positions that will open up this year include the executive European Commission, which will provide the delegates at the South EU Summit with plenty of food for thought. Mr. Muscat has openly endorsed Dutch socialist Frans Timmermans, and he hopes he will be backed by other heads of state when the time comes.
Europe finds itself in a state of flux: uncertainty over Brexit, the battering of many powerhouse political parties in national and regional ballots, and the future of the euro; all topics Mr. Muscat addressed in an exclusive interview on the eve of the summit.
While generally optimistic about the future of the Union, Mr. Muscat is not convinced the Eurozone is currently prepared for further economic shocks. “I think we’ve achieved some progress but it’s still too little. I do hope that we’re not waiting for another financial crisis to come before we take bolder actions.”
“Then again, it’s not easy for the simple fact that there are different schools of thought, but I would like to think that, especially in view of next week’s EU Council, we can focus a lot more on getting things done there”, he added.
Mr. Muscat believes finalising the Banking Union is fundamental to insure banks from future crisis, by deepening integration of the continent’s mostly independent financial systems, but pinpoints the common currency as the key to the door: “If it was up to me, I think that the crucial point is the internationalisation of the euro – making sure the euro becomes an international currency. It’s the only currency that is in a position to position itself an alternative to the US dollar, and it is still not the case. We are in a situation where world-class European companies still bill in dollars. I don’t think that is acceptable, to tell the truth.”
Managing the Migration Wave
One of the focal points of every South EU Summit to date has been migration, with the majority of Southern EU countries considered ‘frontline’ countries, having had to tackle the flow of a disproportionate number of migrants since the peak of the migrant crisis in 2015. And while all Southern European states have been affected, as an island nation of only 460,000 inhabitants, Malta feels the pressure especially intensely and hosts the second-highest number of refugees per capita, with the fourth-highest proportion of positive decisions on asylum applications in the EU. As a result, similar to other Member States, Malta considers the establishment of a common immigration and asylum policy to be a very high priority but, unlike other countries adopting less-than-humanitarian measures, Mr. Muscat believes Europe – as a whole – should look at the issue from a different angle.
“[Migration] should not necessarily be seen as a burden”, he says. “It’s a phenomenon that needs to be managed, and also not leaving this subject in the hands of extremists. I think people who are concerned about migration are not racists in nature. They have real concerns. On the other hand, if we mainstream political parties [and] don’t address those concerns, those people will think that the only people concerned about migration are the extremists, so that’s why we should continue discussing migration and not separating migration from security and human rights.”
Malta’s Prime Minister is of the belief that EU-wide discussions are stuck in the past, and success in overcoming the current debacle resides in adopting a new mindset.
“I think [the Summit] has become a standard fixture that in itself will earn more gravitas and will become stronger within the European Union” Maltese Prime Minister Joseph Muscat
“I think it has to evolve a lot, and be given a more European perspective than anything else”, comments Muscat.
“I totally disagree with those who say this is a security issue, or those who say this is a human rights issue”, enthuses Muscat, “It’s both a human rights [and] it’s a security issue, it’s a climate change issue, it is a demographic issue, it is a cultural issue (…). We acknowledge that there needs to be border control. We acknowledge, also, that it’s not as simple as saying you know, we’ll build a wall. We cannot build a wall in the sea.”
United Action on Climate Change
Some experts predict that climate change will in the near future lead to a huge increase in the movement of people, a so-called “climate exodus”, and the EU already has ambitious goals to go carbon neutral by 2050. In May, a joint statement signed by France, Belgium, Denmark, Luxembourg, the Netherlands, Portugal, Spain, and Sweden, stated the Union should have net-zero greenhouse gas emissions by the middle of the century “at the latest”, demanding that a full 25 percent of the EU budget be assigned to achieving this goal. The group said their plan can “go hand in hand with prosperity” and “set an example for other countries to follow”.
Despite its commitment to the proposal, Malta is lagging behind its European counterparts. Like Cyprus, Malta has switched from relying on oil to natural gas, which has reduced emissions. The next step, however, is to phase out conventional vehicles for electric alternatives – a space where Muscat hopes the island-nation will be able to take the lead – but this will require an entirely new infrastructure.
“We aspire to be amongst the first batch of European Union Member States to switch totally to electric vehicles”, comments Muscat. “We’re aware of the challenges (…) but that for us is the next big priority, that will lead again to a very significant cut in our emissions, and will help us meet the targets that we envisage.”
Embracing Disruption
Malta has proven that it’s capable of pioneering innovation, providing an advantage, even if it needs the help of its European partners to tackle climate change. With both the smallest and fastest-growing economy in Europe, Malta is globally renowned for its leadership in the digital sphere, particularly in regards to blockchain technology and its booming iGaming industry, earning the country the nickname “The Blockchain Island”. This has also attracted heavyweights in the industry to set up shop in Malta, including the world’s largest crypto exchange, Binance. Now, the country aims to take Distributed Ledger Technology – which is the tech that underpins both blockchain and cryptocurrencies like Bitcoin – in directions to further diversify services, both for the private sector and the government.
Nonetheless, taking the lead in the DLT space doesn’t come without its challenges, specifically when it comes to mitigating the risks associated with nascent disruptive technologies; namely, money laundering and the financing of terrorism. And yet, the Maltese Prime Minister is confident the solution to this predicament can be found within the actual technology.
“A system such as blockchain enables you not to tamper with the system, and to circumvent all this in a way whereby the traditional systems of AML are very vulnerable. So, I think that the solution is actually in the challenge itself.”
Malta has also positioned itself as a European “sandbox” for digital technologies, like artificial intelligence, and demonstrates model economic resilience for the rest of Europe in the face of future shocks.
On that score, Muscat is optimistic the next European Commission will “seek to be very bold on innovation, very bold when it comes to DLT”, with Malta poised to play a crucial role in the eventual creation of an EU-wide framework for DLT products and services – something else that will be discussed at the South EU Summit.
“I am an optimist by nature”, Muscat says, noting that the recent European elections acted as a sign of a general shift in the traditional framework that has underpinned the union: “I do think that the results of the selections did provide a positive signal – by the people – to the leaders of Europe, where they want to take our continent. So, I do hope that in our discussions – and I’m sure that in our discussions – there will be a great deal of optimism, not the gloom and doom that we have heard so many times over the past few months and years.”
