Valletta: Small boats are motoring across the grand harbour of Malta on a winter morning beneath a cloudless sky. The waves are low and the wind is down as the boatmen take their passengers, five or six at a time, across the gleaming blue water.
The only challenge for a tourist is to keep the balance in the traditional boat, known as a dghajsa tal-pass, and watch out for someone leaning out to take a selfie – a shift in weight that can tip the vessel on its side.
The conditions, in other words, are perfect. Malta looks like a nation free of troubles.
But this small part of Europe is showing the strain from years of strong growth, high migration, surging tourism and rapid cultural change. It also has a nagging problem that makes some of its citizens anxious about the future.
“I weep for my country,” says one business owner. He thinks it is too hard to find young Maltese workers to fill jobs, and he does not like the heavy reliance on migrant workers to run basic services.
Growth is good. The economy grew by about 4 per cent last year and is tipped to expand by 3.8 per cent this year, while major European countries drift. The national debt is 47 per cent of economic output; in France it is almost 120 per cent.
However, Kevin Cassar, a professor of surgery at the University of Malta and a regular commentator on national life, believes a shock is looming.
“The truth is that the lifestyles that people enjoy now cannot be sustained into the future unless there are radical changes,” he says.
“And those radical changes, with regards to income, will be painful changes. This is why no political party wants to go down that route.”
“People have become used to a certain quality of life, a certain level of earnings, and yet we have this bizarre situation where people are earning more, but the buying power of that income is significantly reduced.”
Malta is now having an urgent debate about family policies to make it easier for young couples to have children. Anna Borg, a professor at the University of Malta, is arguing for more paternity leave, extended maternity leave and greater action on gender equality.
“This can’t just be a responsibility for mothers. There must be opportunities for men to take an active role in caregiving,” she told The Times of Malta last year.
Housing is a key issue. Property prices have risen by about 75 per cent over the past decade, according to the Central Bank of Malta, and parents worry that their children will not be able to own their own homes.
Incomes are up, so the bank is not alarmed about affordability. The increase in migration, however, is a factor.
“Malta cannot rely indefinitely on population growth to maintain momentum,” the International Monetary Fund said this month. It noted that Malta’s population density was 15 times greater than the EU average and that this put a strain on housing.
From 2000 to 2023, the population grew from 391,000 to 563,000. One policy, a “golden passport” scheme to sell citizenship to foreign investors, rankled with the community and was stopped last year. But the biggest factor was the demand for workers to run essential services.
This means that 28 per cent of the population is of foreign nationality. From hospitals to hotels, the country relies heavily on its new residents.
Tourism keeps the demand strong. Malta hosted just over 4 million tourists last calendar year, up 13 per cent on the previous year. While the migrant intake in Malta is about the same as in Australia as a proportion of the population, the change feels too fast for some.
“It’s been a massive jump in a short space of time,” says Cassar. “So the main problem that we’re facing is the radical change.”
This kind of debate has fuelled the rise of the far-right in countries like Germany, but Malta has two major parties, Labour and the Nationalists, that dominate the parliament. Labour is in power. Cassar has family ties to the Nationalists, but his commentary in The Times of Malta criticises both sides.
Visitors can see how important migration has become. In Valletta, the capital, it is possible to eat at a restaurant serving Maltese food served by waiters from India who work for a manager from Albania and an owner from Malta.
As long as tourism grows, the demand for foreign workers will increase. As their society changes, some Maltese even worry about whether their language will survive in a digital world of artificial intelligence.
“The continuation of the country as a nation depends on the younger people,” says Cassar. “I think the measures that need to be taken need to be quite radical.”
He suggests restrictions on foreign investors buying property, tighter rules on short-term property rentals to tourists, a halt to the rapid migration of recent years and changes to inheritance rules so that grandparents can pass their assets to grandchildren, skipping a generation.
Malta is not alone in facing these challenges. Most countries in Europe are debating their welfare spending, education policies, migration settings and housing supplies. No EU nation has a fertility rate above the replacement rate, generally seen as 2.1 births per woman.
Australia is experiencing some of the same trends. The fertility rate in Australia is 1.5, also below replacement. Parents in Australia worry about housing affordability for their children, just as parents do in Malta.
The pressures, however, seem all the greater on these beautiful islands in the Mediterranean.
Malta is a small but tough nation that has defied conquering armies and navies for centuries. It will have to adapt to these changing times as well.
Get a note directly from our foreign correspondents on what’s making headlines around the world. Sign up for our weekly What in the World newsletter.
David Crowe is Europe correspondent for The Sydney Morning Herald and The Age.Connect via X or email.
