Malta, the EU's smallest member state, has been dealing with some big issues in recent years. The country of 400,000 people has been buffeted first by the recession in the rest of Europe and, more recently, by the uprisings in North Africa.

The economy was not as badly hit as some other European states such as Ireland, Greece or Portugal, but the local tourism and manufacturing industries did suffer a downturn. Now, however, the economy appears to be recovering, with growth of 2 to 3 per cent predicted for this year.

The government has been focusing its energies on seven sectors. Along with tourism and manufacturing, they include financial services, information and communications technology, the maritime industry, healthcare and education.

Its efforts to reinvigorate the economy have not been helped by the uprising against the regime of Muammar Gaddafi in Libya, just over 200 miles to the south. There has traditionally been strong commercial links between the two countries which have had to be put on hold.

However, the Libya conflict has offered the opportunity for Malta to enhance its already strong diplomatic links with the UK, the colonial power on the island until it gained independence in September 1964.

Malta played a key role in the evacuation of British nationals from Libya when fighting broke out in March, being used as a staging post on their way back to the UK. That was high up the agenda when Malta's Prime Minister Lawrence Gonzi visited 10 Downing Street for a meeting with his counterpart David Cameron on 10 May.

"The major things we discussed were related to what is now happening in Europe and the region around Malta," says Gonzi, in an exclusive interview with The Report Company. "I was particularly pleased to note the British Prime Minister's appreciation of what Malta did during the peak of the crisis in Libya with the need to suddenly help many nationals, including British citizens, get out of Libya."

"The understanding of the position of the two countries is something which is very special for us," he adds. "I've been Prime Minister of Malta for seven years now and during that time have met with prime ministers all over the world, but there is a special spark that exists between Malta and Britain. I've worked with Tony Blair, I've worked with Gordon Brown and I now believe I have excellent relations with David Cameron and other ministers."

Malta is perhaps best known in the UK as a tourist destination, not least because of the regular Easyjet and Ryanair flights from British airports to the island. However, a number of major British businesses have a significant presence on the island, including HSBC Malta, which is one of the largest banks in the country, and De La Rue, which prints biometric passports from its base at Zejtun in the southeast.

One advantage for such companies is that being in a small economy means access to senior government figures, regulators and other decision makers is relatively straightforward.

Mark Watson, a UK banker who came to Malta in 2009 as chief executive of Valletta-based Mediterranean Bank, points to a number of other plus points.

"There's a good education system here, people are well educated," he says. "Professional services are good, so you can get good accountants, lawyers and IT people. Everyone speaks English and contract law is in English. With a tax friendly environment, if you put those things together it's a good place to do business and I think a lot of people are starting to realise that."

Being a small open economy, Malta relies on international trade and attracting international businesses. It must be hoping now that, after the recession and the Arab Spring, it will have some time to focus on building up such links and developing its economy further.