Jeremy Cassar Torregiani was on Il-Każin, following the Court’s decision to slash compensation for the shareholders of the National Bank of Malta over the appropriation of their bank shares in 1972-73. You can watch the full interview below. He gave a very original version of historical events, which is known uniquely by himself.
In the beginning of the itnerview, Jeremy Cassar Torregiani blames the Labour government for Malta’s declining economic conditions in 1971 and 72. He also contextualizes this decline in the eventual bank run that happened to the National Bank. This is of course false on every level because Malta’s economic decline began as early as 1968 along with Europe’s economic disturbances. Malta was feeling various economic pressures at that particular time such as the closure of textile factories in anticipation of tariffs reduction.
Primarily, Malta’s economy started a decline due to the lack of quality and regular jobs with tens of thousands having to immigrate as a result during the decade and emigration peaking in 1969 during a massive housing crisis. The Nationalist administrations of the 1960s, backed by Malta’s land-owning and commercial elite had excessively focused on tourism and the construction industry as a means to create jobs in an underdeveloped economy, creating as a result excessive real-estate speculation in a very small and illiquid market. The government was literally handing out parcels of land for free (100-year concessions on the pennies) for local businesses adding to the exuberance.
For the first time in history, in 1969, young people took to the streets to protest against the housing crisis and housing affordability. The property market was in a massive bubble fueled by a dozen of speculators who could control the direction of the market.
In 1971, this bubble popped and the construction industry halved in size – literally reducing from 10,000 to below 5,000 workers. This decline was significant in the context of the consistent and gradual reductions of British Services in Malta. However it wasn’t just workers that felt the pain. When the property bubble burst a massive wave of defaults also affected the National Bank of Malta with many property speculators failing to raise capital to continue their projects or to make any sales. The decline was so apparent that you could drive through streets with many construction sites abandoned and empty – many of which were never even picked up again until the recent property boom reignited in 2013.
The economic and financial damage that inflicted the National Bank of Malta having been one of the main driving forces of the property boom, was immeasurable. Literally, a dozen of people were turning Malta into a Banana-Cuban-like-Battista-Republic were a handful of casino owners and land speculators run the show. The burst of the property bubble gave the government of that time an opportunity to rectify matters and even change the paradigm of the economy from a speculator-based economy to a productive economy. Basically, this was Malta’s transition out of feudal economics.
Jeremy Cassar Torregiani depicts the owners of the National Bank of Malta, especially his family, as successful and benevolent capitalists who “invested” in Malta. This can not be further away from the truth. His family was the land-owning elite who accumulated wealth over their monopoly of wheat imports and the bread tax system which punished the poor and awarded merchants. In addition, these land-owning families and wheat merchants, amounting to literally half of dozen of families, didn’t really invest in Malta at all. They hoarded and speculated property in Malta and invested their surpluses at the London Stock Exchange – we also know this by their own admission and testimonies, who consistently argue, that Malta was a bad place to do business because it was a small market.
They weren’t capitalists. They were speculators and monopolists who operated in a quasi-feudal like economy.
He fails to mention many other things in he interview such as that the bank was injected with public capital to prevent its collapse. On the other hand, it is true that Bank of Valletta was used and abused by the Labour government to enrich its associates with Tumas Fenech being the prime example of this phenomenon: the up and coming corrupt and criminal Labour nouveau riche. However Tumas Fenech and this new class of speculators which aspired to overturn the Cassar Torregianis in power and influence, were not representative of Malta’s economy during the Mintoff era. The Labour government successfully created a conventional and civilian economy with the manufacturing industry being the biggest employer and the backbone of the economy. The Labour government successfully created an economy that works and which eventually, transitioned Malta out of poverty and into developed economy status. Bank of Valletta was crucial for this transition and this economic transition could have never happened if the banking and the real-estate sectors remained under the control of literally a handful of monopolists.
The government also failed to put a strong case in Court in this case, even failing to present evidence – this is why eventually Jeremy Cassar Torregiani and other shareholders were awarded compensation. Jeremy Cassar Torregiani originally asked for €1.4 billion – the total market cap of BOV at that time of the request.
Jeremy Cassar Torregiani is a relic of Malta’s past — that era when a single Maltese individual could feel entitled to own the country’s entire economy. Jeremy Cassar Torregiani exhibits precisely the same behaviour. The fear today is that we may once again fall into the same old miseries that he is so eager to resurrect.
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