Malta [European Journal of Political Research 49]

Abstract

On the face of it, the year was a bleak and unedifying one in politics. Having dodged the international financial crisis, largely thanks to a tradition of conservative borrowing and lending habits, the country was not spared the trying times of global recession. Malta went into recession during the second quarter and remained there for the rest of the year as the export and tourist markets shrank, although this was mitigated by a modest growth in the services sector.The government responded by extending financial assistance to export- oriented firms, on condition that they retained their workforce and used the slowdown to make fresh investment in anticipation of an eventual global recovery.While this helped to save jobs, keeping unemployment well below the average in the euro area, it may have done so at the cost of rising inflation and a high public deficit.