U.K. gets Brexit message from its old friend Malta: Goodbye and good luck

(Bloomberg) -- On a cool Mediterranean evening in Valletta, John Cauchi was in a café watching friends engage in the most English of pastimes, a game of snooker on a plush green table.

It was the day before European Union leaders arrived in Malta’s capital for last week’s summit to discuss, among other things, the U.K.’s decision to quit the bloc. Like many Maltese, Cauchi is torn: Born at the end of World War II, when his country stood bravely alongside Britain, the 72-year-old has spent his life connected to the former colonial master. But times have changed, he said.

“My loyalties now are more to the EU than to the U.K.,” said Cauchi, a lifelong fan of London soccer team West Ham United. He helps organize competitions at the Anglo Maltese League Club for snooker, which is related to American pool. “We like the British and I was taught English at school. I’m sad about Brexit. I hope the negotiations won’t be tough.”

It may be smaller than the smallest English county, but Malta provides an insight into the European allegiances that Britain will hit head on after firing the starting gun on Brexit negotiations in coming weeks.  As the U.K. seeks to re-establish itself as a global power outside the EU, one of its oldest and staunchest allies sees its own future firmly with its newer friends. 

‘Bizarre’

Maltese Prime Minister Joseph Muscat has repeatedly said the island will be “an honest broker” in the Brexit talks while stressing it’s “very obvious” the U.K. cannot expect a deal more favorable than its current membership.

Days before the meeting Malta hosted as part of the EU’s rotating presidency, Muscat told a rally of his Labour Party supporters in the town of St. Paul’s Bay that the country worked hard to negotiate independence in 1964 and now recognizes how its position has changed after joining the EU in 2004.

“It’s historically bizarre to note that as a former colony, we have come a long way to become protagonists in negotiating the U.K.’s exit from the EU,” Muscat said.

Its 450,000 people make it the smallest member of the EU as the union faces one its biggest problems. Of all the 27 countries opposite Britain at the negotiating table, the most sympathetic might have been Malta. But it’s not.

Privately, Maltese leaders say they feel affection for the island’s British past, but Brexit is about politics and business. They say Britain has made a mistake in voting for Brexit, and see the British government as overly optimistic about achieving almost unreachable goals in the exit process.

Big Brother

“Brexit is a blow because the Maltese view the U.K. as a natural ally given colonial history and the two countries share positions on matters such as taxation and financial services,” said Mark Micallef, an independent researcher in Malta. “But the European Union has brought Malta very tangible economic benefits and has to an extent played a new big-brother role, making the country overwhelmingly pro-EU.”

EU funds have upgraded roads, given a boost to numerous small and medium-sized businesses and -- touching on Maltese pride -- upgraded the 16th-century fortifications in Valletta, he said.

There are similar views on Republic Street in Valletta, its red phone boxes and outlets evoking an imperial past. A stone plaque at the Grandmaster’s Palace, where leaders met, commemorates the award of the George Cross to the people of Malta in 1942 for their wartime resilience. The cross still appears on the country’s red-and-white flag.

Two doors down from the King’s Own Restaurant, Justine Borg works at the Royal Pharmacy. She also laments Brexit, though believes the EU offers more opportunities. She studied in Italy on an EU-funded program.

“The British legacy here is history, it’s in the past,” said Borg, 23. “It made us who we are today. We have a little bit of Englishness, English is our second language. But we prefer the EU.”

Under Siege

Britain took Malta, which is about 100 kilometers (63 miles) south of Sicily, in 1800 after the Siege of Valletta ended French rule. By the time the government in London was applying to join the precursor to the EU in the early 1960s, the island was debating whether to formally join the U.K. before opting for independence.

While most people feel the pull of both Britain and continental Europe, the EU and particularly the euro don’t have universal support. Ron Said, 49, a catering consultant, would prefer to have the British pound back after the cost of living rose. Between 2003 and 2015, Malta grew more dependent on goods from the EU, its trade deficit with the bloc more than doubling.

“The U.K. was right to leave the EU,” he said, smoking outside the StrEat Whisky Bar & Bistro. “It was financing lots of countries, so it was right to leave even just for that reason. What was, was. Now we’re in a different generation, those British links are history, now you have to look to the future.”

Rabbit Stew

The only real remaining link with Britain is tourism, according to Said. British visitors own time-share apartments and flock to hotels, while the island caters to British tastes. On a scorching summer’s day in the resort town of Bugibba, for example, a full, hot, English breakfast is served, as are pints of beer.

In 2003, British travelers made up about 43 percent of all visitors from the bloc. By 2016, after a dozen years of EU membership, the figure was about a third, based on the latest data from the National Statistics Office.

At the Café La Vallette, where John Cauchi was enjoying the snooker, the menu includes sausages and bacon as well as the local specialty: a thick rabbit stew. Louis Schembri runs Perry estate agents office up the road.

“I’m sad that the U.K. decided to leave, it’s not what any of us here in Malta wanted,” said Schembri. “We should be as nice as we can be, but the EU should apply the rules. The British decided to get out. They should pay a price for that.”

To contact the authors of this story: John Follain in Rome at jfollain2@bloomberg.net, Jonathan Stearns in Brussels at jstearns2@bloomberg.net, Karl Stagno Navarra in Rome at ksnavarra@bloomberg.net.

To contact the editor responsible for this story: Andrew J Barden at barden@bloomberg.net, Rodney Jefferson