Watch: Maltese Economist Warns Fringe Parties Could Rise If People Get Poorer As He Calls Out Sanctions
Leading Maltese economist Clint Flores has sounded a warning to the EU over its sanction regime against Russia, arguing that fringe parties could well become more popular if people get poorer.
“Don’t destroy the European economy simply because you made a miscalculation on inflation,” Flores urged EU leaders in a recent vlog. “[French President] Emmanuel Macron lost support at the French legislative elections and will have to form a coalition and I hope populism doesn’t rise in Europe as a result of people not having enough food to eat.”
“We value our freedom but we value our financial freedom too and, irrespective of European ideologies, there cannot be freedom without financial freedom to live a life with dignity.”
Flores, who was recently made Bank of Valletta’s executive head on ESG affairs, said that while Russia’s invasion of Ukraine is condemnable, the EU should seek out diplomatic channels with Russia to try and break the impasse.
“Macron had kept engaging with [Vladimir Putin] until they went behind his back and I believe diplomatic channels should be opened. Keynes famously said that in the long run we’re all dead… people aren’t going to wait ten years for the market to stabilise so that they can keep up with inflation.”
Flores warned sanctions are confusing and scaring European and American businesses who trade with Russian and Belarussian companies, particularly those who purchase fertilizer.
Russian President Vladimir Putin
“Fertilisers and food haven’t been sanctioned but Europe should acknowledge how hard it has become to import these products. Companies are having to play detective, constantly checking which Russian businesses are sanctioned and which ones aren’t and checking whether they have shares in other companies. They don’t want to face the risk and it’s causing a global crisis.”
He also forecast that the European Central Bank’s decision to increase interest rates for the first time in 11 years could have negative implications for Malta’s economic prospects.
“Many people have asked me whether higher interest rates are actually a good thing because it means they will be able to save more money but you can’t look at it from that aspect alone.”
“If interest rates increase, then investors and people who want to renovate their homes won’t invest their money now but will wait until borrowing is cheaper.”
Flores’ intervention comes as Finance Minister Clyde Caruana adopted a critical stance on the Russian sanctions, warning they are harming European workers more than Russia.
What do you make of Clint Flores’ argument?
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