From Mr J. G. Vassallo
Your correspondent, Henry S. Pace, was irked by my piece under the above heading (TMIS, 9 January). Whereas I focused on Dr Fenech Adami’s legacy, your correspondent countered with a paean of praise for Dr Fenech Adami.
The facts are irrefutable. And they scream to high heaven! Malta is sweating it out as a result of the profligacy and excessive borrowing of the Fenech Adami years. People have taken to the streets in protest against the way the government proposes to make good for the damage.
Malta’s present predicament developed after a steady succession of deliberately sustained deficits, which saw the national debt skyrocketing from Lm86 million in 1986 to Lm1.35 billion in 2004. In turn, Malta’s annual debt servicing bill is, today, equivalent to its whole national debt when Dr Fenech Adami first took office as Prime Minister.
There is no denying that, at the initial stages of the Fenech Adami years, public investments yielded results and produced a ‘feel-good’ factor which was skilfully exploited.
The trick was to keep the populace happy by borrowing from it and, feeling good, the populace danced to the Fenech Adami tune.
But the minuses soon began to outpace the pluses at an accelerated pace. There came a point when the Governor of the Central Bank, no less, went public to warn that we were spending well beyond our means. And the Minister of Finance complained that we were living on borrowed money.
It mattered little or not at all. The government persisted in cosying the bureaucracy, in going for fanciful projects (Chambray, AzzurrAir, the Brindisi Port investment) and in setting up Authorities, Foundations, Corporations and a cat’s cradle of other quangos. In so doing, it could give expression to its munificence towards its darlings by way of exercising its patronage.
As if this were not enough, the government’s bent for extravagance showed no sign of moderation. It persisted in its adventurous commitments with little or no regard to its financial muscle. It bull-dozed its way from one mess to the other – the Mater Dei Project, the purchase of Dar Malta in Brussels, the plan to build new premises for Parliament on the former Royal Opera House site are but a few examples.
The day of reckoning had to come It came via Brussels. Once Malta acceded to the European Union, Malta was expected to conform to the Maastricht criteria and was promptly asked to mend its ways.
It is a tall order. It is a cross too heavy for a Prime Minister who lacks experience in office, and who is flanked by a tired crew, some of whom are disgruntled and others consistently out of their depth.
Once more, the facts are irrefutable – the government did not do its homework properly when it drew up a Convergence Plan all by itself. There was not enough research and consultation. Its austerity programme was lop-sided. It proved that the government was out of touch with public sentiment. It panicked. It backtracked repeatedly.
Dr Gonzi is now bearing the brunt. Although he was a co-partner of Dr Fenech Adami when the economy sustained all the damage, main responsibility rests with the latter. The Fenech Adami legacy is not merely a fact of (past) history. It is also a painful, present-day reality that could not be glossed over by Mr Pace’s pointless protestations.
J. G. Vassallo
ST JULIAN’S