From Mr V. Spiteri

What a fine mess we find ourselves in! Here we are, in the middle of a severe crisis, with an unprecedented mountain of debt, with our industry becoming more and more uncompetitive and the palace gang of nincompoops carry on with the charade as if everything is hunky dory.

They cannot even agree on a common strategy that can help us begin clawing ourselves back into solvency.

We have a fine university, to which the hapless working man is contributing an arm and a leg, and which produces a seemingly brainless crop of economists who can only gainsay and contradict each other, contributing less than nothing at finding a solution for the bankruptcy we are rapidly sinking in.

Not for us the solutions that other countries had resorted to as an inevitable consequence of a serious loss of competitiveness. We happen to think that we can go counter to anything that smacks of common sense.

While Winston Zahra was lamenting the closure of several hotels because they were becoming too expensive to run, Radio 101 was mocking Dr Sant for suggesting that we need to devalue the lira to recoup a measure of competitivity.

The quick reply to that suggestion by the latest guru in the finance department, was that devaluation will increase the cost of living and trigger a round of statutory wage rises which will nullify the beneficial effect of such a devaluation.

It seems that it has never crossed the minds of either the red gang on the Opposition benches or the blue gang on the government side, that our troubles have their root in our folly of living way beyond our means and that there is no other solution than learning to manage with what we can earn.

It is therefore not enough for Dr Sant to talk about the need to devalue unless he can also persuade the unions to cooperate. It is not going to be easy. We have been lulled into thinking that money was no problem, that we are the world’s biggest spenders and that the world owes us a living.

Now we are finding that we have to compete, whether we like it or not. Winning markets against fierce global competition means we have to down size our enormous expectations of a continuous, unearned, straight line increase in our standard of living.

We seem to have a complacent Central Bank that thinks we can carry on muddling through, ignoring all the worrying signs of a sick and untenable economy.

There is a limit how much even a Nationalist government can borrow before we end up like a mini Argentina. I do know that, luckily, our debt is largely internal, but there will inevitably come a time when debt servicing will become such an intolerable burden that a government will be forced to default, which will trigger off enormous and unforeseen repercussions.

To conclude, I believe Dr Sant is right in proposing a 10 per cent devaluation, provided he can persuade the unions to accept a moratorium on wages and conditions, at least until we crawl out of the mess we’ve gotten ourselves into.

Victor Spiteri

ATTARD