As the early risers wade through the flotsam and jetsam left behind by last night’s revellers in the cold early dawn of the first day of the new year, one’s thoughts turn to the new year and what it will bring with it on the national level.

On the political-financial level, we are beginning the second full year as EU members, two years away from the next general election as well as the introduction of the euro, a year which will see the initial funding of the EU on accession, agreed on at the historic summit of Copenhagen in December 2002, coming to an end and the final preparations for the spending plans for the new financial perspectives 2007–2013, which come into effect next year.

On the purely fiscal level, the country has turned a corner: it is no longer subject to that uncontrolled runaway fiscal mother of all deficits, and it is slowly bringing the beast under control even though we are still some way away from saying the deficit is totally under control, as well as the government debt and inflation – all necessary indices on our way to the euro, which is Malta’s next big target.

But this has come at a price, a heavy price, because while the government has not made any substantial cuts in public expenditure,

(which would have caused a lot of pain), the increased government revenue came from one source only: the pockets of Maltese citizens who have seen their purchasing power and standard of living curbed over the past years.

At the same time, however, anyone observing the hordes of people coming out of Valletta over the past days with bulging shopping bags (even people identifiable as immigrants), and people out eating and enjoying their Christmas dinners and parties, could see that for all the jeremiads made by retailers and shopkeepers, people were out enjoying themselves, and spending, and buying. The people too, looked less dishevelled then they tend to look throughout the year, as the big spenders, those who normally are not seen since they would be working, were on shutdown and out and about.

Meanwhile, there are still pockets of poverty, wide swathes of long-term unemployed, families on social assistance, pensioners and other less advantaged sectors of the population who simply cannot cope with the higher prices of just about everything. For some, many, life has become infinitely harder. Some make ends meet, either through part-time work or through the black economy, but others cannot do so and they are beyond the reach of the government’s social assistance network.

It is also a fact that Malta had one of the lowest growth rates in the EU and the EU, in turn, was the slowest growth region in the world. Unless there is growth injected in the economy there can be no end to the country’s fiscal problems. Growth cannot be injected by the government, any government, for growth can only come from the private sector, which is still not feeling confident enough, as all business surveys show, to invest in the economy. On the contrary, it believes it would be more opportune for it to invest anywhere else rather than here. Wages keep going up with no relation to productivity, government-induced costs keep on increasing and business still has to experience, along with families, the full impact of the fuel price supercharge. And even with these wage increases, people generally still feel they cannot cope with inflation and the expectation of a European standard of living.

This is why the way ahead for the government is still very much uphill. Stimulating growth should be its focus, but it somehow never gets to be mentioned. In the short term, tackling the privatisation of Bank of Valletta and Maltacom will be among the government’s most difficult tasks in the coming months, as well as the port reform, the pensions reform and preparing for the euro. Other tasks, like ensuring far higher educational standards that leave no one behind, attracting sustainable investment from abroad and ensuring that Malta benefits fully from EU membership, must not be forgotten.

Politically and at trade union level, anyone might think the country is in free fall, irremediably split down the middle and on the eve of a revolution. The Opposition is there to oppose and the trade unions are there to do their job and defend the workers, but

the government would be very ill-advised to jump into the fray and turn the coming three months into the usual pre-electoral melee, which, punctually every year, inflames spirits and widens the perception that the Maltese are at each other’s throats.

Now that morning has broken, and the corner turned, it is the government’s duty to lead the country to a higher level still.