THE OUTLOOK FOR AN INDEPENDENT MALTA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004600110002-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 21, 2016
• Document Release Date: March 24, 2009
• Sequence Number: 2
• Publication Date: October 30, 1964
• Content Type: REPORT

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30 October 1964
N OC I No. 035564A
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30 October 1964
THE OUTLOOK FOR AN INDEPENDENT MALTA
Malta on 21 September became the eighteenth
British territory to gain independence since World
War II. Its prospects for political stability and
economic well-being, however, are not auspicious.
Malta's most difficult, and perhaps insoluble, prob-
lem is its lack of economic viability. Its rela-
tively high standard of living is dependent not
only on continued foreign aid, but also on skill-
ful planning to make its limited export commodities
and services competitive. Maltese politics are
complicated by the powerful influence of an un-
usually conservative Catholic episcopate. The
Malta Labor Party (MLP) opposition, led by an er-
ratic neutralist.. who is given to flirting with
Moscow and Cairo is not only determined to change
the constitution but is more dynamic than the rul-
ing Nationalist Party. The MLP has a good chance
of coming to power in the elections due sometime
before March 1966. The new state contains NATO's
Mediterranean command headquarters, but NATO is un-
decided on what terms it will offer Malta for con-
tinued participation in the alliance. This, to-
gether with the prospects of an MLP government,
raises the specter of a Soviet toe-hold in the mid-
dle of NATO's present defense perimeter.
Background
Malta's constitutional
evolution has been a stormy one.
In 1957, the then Prime Minister
Dom Mintoff (who as head of the
Malta Labor Party is now the op-
position leader) sought full po-
litical integration with the
United Kingdom but failed to ob-
tain it because of excessive de-
mands for economic aid. The dis-
turbances he fomented after re-
signing in April 1958 culminated
in a general strike which prompted
Britain to suspend the constitu-
tion and rule directly for the
next four years. The Maltese
were eventually persuaded, with
zonsiderable difficulty, to
agree on terms for internal
self-government, and elections
were held in February 1962.
Dr. Georgio Borg-Olivier's
Nationalist Party (NP) won 25
of the 50 seats in the legis-
lature; the MLP took 16, and the
remaining 9 went to the three
minor parties. Mintoff's de-
feat was largely attributed to
the influence of the Catholic
Church. The MLP's subsequent
drive to eliminate the privi-
leged position of the church,
including its immunity from
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legal prosecution, led to a pro-
tracted haggle over the consti-
tution which caused a four-
months' postponement of independ-
ence.
In the negotiations. Lon-
don sought, in order to accom-
modate the MLP, to eliminate
from the NP draft constitution
certain discriminatory provi-
sions against non-Catholics in
personal religious matters. There
is, for example, no provision
for civil marriage or divorce,
but Borg-Olivier finally agreed
to make arrangements for civil
marriage for non-Catholics and
those Catholics willing to leave
the church. Also, sections plac-
ing church above the law on hu-
man rights were deleted..
Agreements initialed earlier
this year on defense and eco-
nomic aid came into force on 21
September. The price for a 10-
year defense agreement was a Brit-
isb commitment to give Malta
$142.8 million over that period.
For the first five years, dis-
bursements will be 75 percent in
loons and the rest in grants;
subsequent apportionment has been
left unsettled. About $52 mil-
lion is to be paid out "without
strings" before March 1967; the
remainder will be contingent on
the military base agreement's
remaining in force.
The defense agreement puts
Malta under a British security
umbrella by providing for mutual
defense, Maltese acceptance of
British advice and military as-
sistance, and the right of the UK
to station forces in Malta for
ten years in peace or war. As an
2
attempt to block Soviet or other
intrusions, no other forces ex-
cept Maltese and NATO will be
allowed this privilege. In case
of emergency, the UK would also
have sole use of the large Luqa
airport.
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Current Political Situation
In addition to the National-
ists and the MLP, there are
three minor parties--all of
which may disappear by the next
election. The Christian Workers
Party (CWP), led by Anthony Pel-
ligrini, splintered from the MLP
in 1961 over Mintoff's hostility
to the church. With a church-
MLP reconciliation in the off-
ing, the CWP may rejoin the MLP
or at least form a postelec-
toral coalition with it. The
Democratic Nationalist Party
(DNP), controlled by Hubert
Ganado, is a breakaway from the
Nationalists who had wanted
to delay independence until eco-
nomic viability was achieved.
The DNP finally supported the
Nationalists on independence
terms, however, and is now con-
sidered likely to merge with
them or disappear. Having op-
posed independence in favor of
continued ties with Britain,
Mabel Strickland's small Prog-
ressive Constitutional Party is
also slated to vanish.
The government Nationalist
Party is basically conservative
and has always stood for inde-
pendence within the Commonwealth,
a special position for the
church, and alignment with the
West. Indeed, Borg-Olivier not
only has promised to retain
NATO's Mediterranean headquar-
ters on Malta, but also wants
to establish some sort of for-
mal association with NATO. He
will be visiting the US from
5 to 20 November to arrange for
Malta's entry into the UN and
will presumably take the oppor-
tunity to make another pitch for
US aid.
In contrast, the outlook
of the Socialist-oriented MLP
is increasingly antichurch,
anti-West, neutralist, and anti-
NATO. Party leader Mintoff is
opposed both to the present con-
stitution and to the defense
agreement with the UK and has
gone on record as saying he would
try to change both if he came
to power. With a claimed mem-
bership of 60,000, the MLP has
long been the most powerful
party, partly because of its
control of the largest labor
confederation.
In the last few years,
Mintoff has visited the UAR,
Algeria, Italy, Greece, Yugo-
slavia and Moscow, soliciting
support for independence. He
seems to have acquired only
moral support and vague promises,
but this may change. The only
concrete evidence of UAR sup-
port is the commencement of
Radio Cairo broadcasts in Maltese
in May, but clandestine arias
aid is always a possibility. In
fact, a Maltese minister re-
cently requested two fast pa-
trol boats from the US for sur-
veillance use because he feared
that Mintoff-supporting fisher-
men might rendezvous with for-
eign vessels off the coast and
bring contraband weapons into
Malta.
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In Moscow last June, Min-
toff was promised Soviet back-
ing at the UN and elsewhere but was
informed that his request for
arms would have to be "studied."
Mintoff left somewhat disil-
lusioned. An earlier Soviet of-
fer, however, to give Malta eco-
nomic aid should Mintoff be-
come prime minister and declare
Malta a neutral country, pre-
sumably stands.
On the domestic front, the
MLP's fortunes hinge on a com-
bination of economic factors
and on the final outcome of the
recent efforts of both the
church and Mintoff to reconcile
their differences. Archbishop
Gonzi took the first step in
late September by lifting an
interdict laid on the MLP exec-
utive in 1961. Immediately
thereafter, Gonzi and Mintoff
met in a secret rendezvous to
consider further steps. One
of them was the lifting of
another interdict on a news-
paper editor. According to
Mintoff, all this is "just a
beginning."
The Nationalists have the
credit for winning independence
and are currently favored to
win the next elections. These
are due by February 1966 but
could be held sooner. With a
90 percent Catholic population,
Mintoff's prospects will be
greatly enhanced if he makes
his peace with the Church and
if he skillfully exploits the
roadblocks to economic develop-
ment which the prime minister
is likely to encounter.
Economic Prospects
With an area of only 122
square miles populated by 330,-
000 people, and possessing al-
most no resources beyond skilled
labor, Malta has been kept eco-
nomically viable only by gener-
ous British aid and military
spending. Changing strategic
interests have produced such a
drastic decline in military ex-
penditures that the resultant
loss of income may cause un-
employment to rise from its
present estimated 7 percent
to about 25 percent by 1967.
The government's development
plan aims to create new jobs,
but the rate is hopelessly slow
in comparison to the need.
None of the various sur-
veys to date has held much hope
for Malta's achieving economic
viability. The British have
hoped--somewhat optimistically
--that the situation can be
controlled by a combination of
UK assistance, more energetic
development of the tourist trade,
increased emigration, and fur-
ther development of light in-
dustry. The dockyard, Malta's
most important economic aset,
will have to cut back further
on redundant workers to remain
competitive with other Mediter-
ranean yards.
In any event, Malta will
require more foreign assistance
than that which the UK has
agreed to provide if it is to
retain the kind of living
standards to which it is ac-
customed. Exports are essential
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because of the tiny domestic
market, but shortages of both
water and electricity discour-
age investment. Horticultural
exports are doing well, but the
tourist potential has probably
been overestimated.
be linked to NATO, possibly by
an exchange of letters between
NATO's secretary general and
the Maltese Government. The
Belgians want to offer full
membership; the French would
prefer no dealings with Malta
at all.
NATO and Malta's Military Role
NATO is anxious that Malta
does not become a security
threat to Western interests in
the Mediterranean but is un-
certain how to fit the island
into the alliance's structure.
Malta has agreed to honor exist-
ing agreements regarding the
NATO headquarters of the com-
mahder in chief of the allied
forces in the Mediterranean,
at'least until new arrangements
have been discussed. In the
meantime, the question has been
fuzzed over on whether Malta--
which is also the site of an
important British naval and air
base--is legally within NATO's
defense perimeter.
NATO members are sharply
divided over what Malta's con-
nection with the organization
ought to be. Although there
has been some thought of trans-
ferring the NATO command to
Naples, this would be expensive.
The UK considers full or even
associate NATO membership for
Malta to be unrealistic. Lon-
don is nonetheless anxious
for the command to be retained
on! Malta and for the island to
6
Although Borg-Olivier has
publicly said he hopes that dis-
cussion with the NATO Council
will establish a new and closer
relationship, sentiment in NATO
seems to be growing in favor of
putting off a final settlement.
One motivating factor appears
to be the chance that the anti-
NATO MLP will come to power be-
fore long. In the meantime,
there is some thought of enmesh-
ing Malta with Europe via mem-
bership in such bodies as the
Council of Europe and the OECD.
Britain's position in Malta
was in a state of flux well be-
fore the new Labor defense min-
ister took over. On the one
hand, the British had been
gradually reducing their forces
on Malta, even before independ-
ence, because changes in weap-
onry and strategic priorities
have made the island's facili-
ties much less important than
in the past., On the other,
London wants to maintain enough
facilities for a forward operat-
ing base, and recognizes that
Malta's military importance
could rise in the future. The
British are acutely conscious
that if they are pushed totally
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out of both Libya and Cyprus,
Malta could become an indis-
pensable link in their stra-
tegic air transport system to
both the Middle and Far East.
Outlook
For the time being, the
Maltese Government is unlikely
to make any moves that will
jeopardize its existing ties
with the West and its prospects
for getting aid. Prime Minister
Borg-Olivier recently told the
US charge, for example, that he
sympathized with the US position
both on recognizing Taipei and
keeping Peiping out of the UN.
Although he said he could not
yet commit his government, he
is likely to go along with Wash-
ington on Chinese policy.
Should Mintoff again come
to power--and his present chances
are not bad--the outlook would
be more bleak. There are al-
ready some Communists in the
MLP, and there is no reason to
believe that Mintoff will give
up either his anti-Western pro-
clivities or his authoritarian
inclinations. Even though he has
a good prospect of coming to
power legally, there has been
concern in the past that he would
try a coup, and this can by no
means be discounted now. In
any case, he may well try another
series of harassing demonstra-
tions, particularly after he has
had time to build up current
low morale in the MLP. He
might be willing to permit
NATO and British facilities to
remain on Malta if the price
were right. He is more likely
to try to obtain Soviet and
Egyptian aid by offering to
eliminate the vestiges of a
Western military presence on
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