Malta, Libya's Neighbor, Is Bouncing Back

The island of Malta is having a rocky spring, as the conflict in nearby Libya has hurt Maltese companies that invested in the North African state. The five-star, 300-room Tripoli hotel owned by Malta's International Hotel Investments, for example, now caters to a few dozen reporters. "The instability doesn't help," says Finance Minister Tonio Fenech.

Yet Malta is well-positioned to weather the turbulence. Its economy grew 3.7 percent last year—the fastest rate in the euro region, which it joined in 2008. The International Monetary Fund is predicting gross domestic product will grow 2.5 percent in 2011, more than the 1.6 percent predicted in the euro zone. In the capital of Valletta, tourists still fill the cafes that line the waterfront beneath stone bastions.