Germany and Malta: Bilateral relations

20.10.2021 - Article

Malta gained its independence from the United Kingdom in 1964. Germany and Malta have maintained diplomatic relations since 1965. Malta has been an EU member state since 1 May 2004.

The country has an open market economy. Germany is one of its most important economic and trading partners. Some 50-60 German companies currently operate in Malta. At the end of 2019, German direct investment in Malta stood at 22 billion euro. 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.

Malta cushioned the economic impact of the COVID-19 crisis not least through wage supplements. Loss of revenue was experienced in the tourism sector and trade. The building, IT, gaming and financial services sectors, however, saw positive development. Malta is to receive 316 million euro from the European recovery and resilience programme. Nominal GDP fell from 14 (2019) to 13 (2020).

In 2019, approximately 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. After a budgetary surplus was achieved again in 2019 (0.4%), a deficit of 10.1% is expected for 2020. The government debt ratio increased from 42% in 2019 to approximately 54.3% in 2020. This deterioration is due to increased spending, for example for aid packages and lower tax revenue due to the pandemic.

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).

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