The COVID-19 pandemic and the recovery and resilience plans of Cyprus and Malta

Abstract

The coronavirus pandemic has had a significant impact on the global economy. This dissertation will be discussing the impact that the Covid-19 pandemic had on the economies of Malta and Cyprus, with a particular focus on the digitalisation aspect. In addition, another significant section of this study focuses on the Recovery and Resilience Facility, a pivotal tool developed by the EU to support economic recovery after the aftermath of the pandemic. This study involves a comparative case study, using quantitative and qualitative data sources between Malta and Cyprus. The main objective is to analyse which sectors of the economy were impacted the most and to analyse whether digitalisation contributed to mitigate this impact. Moreover, the aim is to also analyse how both countries are improving the digital transition through their National Recovery and Resilience Plans. The decision to opt for Malta and Cyprus is since the two EU member states share similar characteristics, such as their small economic size and large tourism sectors. This study has found that the economies of both countries were heavily impacted by the pandemic since both are highly dependent on the tourism sector. As regards the digitalisation process, the results from the DESI index show that Malta has always performed better than Cyprus even before the pandemic and that albeit Cyprus improved its performance, it still ranks below the EU average. Furthermore, it was concluded that both countries need to improve their performance in certain sectors. Lastly, regarding the National Recovery and Resilience Plans of Malta and Cyprus, Cyprus received more funds and requested for loans whereas Malta only received grants. In addition, both countries have allocated more funds than the minimum requirement towards digitalisation.