Germany and Malta established diplomatic relations in 1965, shortly after Malta gained independence. Malta has been an EU member state since 1 May 2004.
The country has a very open market economy and Germany is one of its most important economic and trading partners. Some 50-60 German companies currently operate in Malta, including many manufacturing companies that serve international markets. German direct investment in Malta stood at 23 billion euro at the end of 2018. The largest percentage comes from financial services but it is manufacturing industries that are providing the most jobs, including Playmobil, as well as technical service industries such as Lufthansa Technik and Oil Tanking.
In 2019, tourism, financial services and online gambling were very dynamic sectors. The financial services sector was not strongly hit by COVID‑19. The highly technology-based online gambling sector was able to adapt to working from home relatively quickly. Sports betting fell while other spheres such as online poker and casinos saw turnover increasing.
In 2019, the 2.8 million holidaymakers and 766,000 tourists from cruise ships generated an estimated 25-30% of GDP. As a result of the pandemic, 2020 saw a 76.1% drop in tourism and a 92.3% fall in the cruise ship sector. The number of inward and outward flights fell by more than 60%. After achieving a budgetary surplus in 2019 (0.5%), a deficit of 9.5% is forecast for 2020. The government debt ratio increased from 42.4% in 2019 to approximately 55.3% in 2020. This deterioration is due to increased spending, for example for aid packages and lower tax revenue due to COVID‑19.
The German-Maltese Circle has fostered cultural relations between Malta and Germany since 1962. It offers language classes and organises events such as exhibitions, film screenings and concerts, thus filling the gap caused by the absence of a Goethe-Institut in the country.
There are also a number of joint projects between the University of Malta and the Malta College of Arts, Science and Technology with various German educational institutions. Since the 2009/10 winter semester, the Federal Foreign Office has funded a German Chair in Peace and Conflict Prevention at the University of Malta’s Mediterranean Academy of Diplomatic Studies (MEDAC).