The Malta Labour Party deputy leader for parliamentary affairs, Charles Mangion, may have hit the nail on the head, in political terms, when he described the economic situation during a meeting for MLP activists last Sunday.

He said that certain sectors of the economy were doing well – and he mentioned banking, financial services and IT – but the positive impact of such progress was not being felt by the man in the street.

There are two issues here. The first is that a Labour top official, the second in command for that matter, has admitted that the economy – or at least part of it – is doing well. Praise for the government from the opposition is something that we are not used to have, but this in itself shows the speaker’s political maturity.

But the second part of his statement is perhaps the most important. This is because what Dr Mangion has said is true – the country, as a whole, has overcome a difficult time and is now doing economically well. Yet, the effect of such blossoming is not being felt by the people.

The considerations that were made by Dr Mangion – he was not the first but his statements carry more weight because of the position he holds – will be a determining factor in the outcome of the next general election.

The people know that the country is doing better, as a whole. We have fulfilled all the criteria established to switchover from the lira to the euro as from 1 January, and this is already a good indication that Malta is on the right track. The tourism industry has picked up after a lean period. Investment keeps coming in and more jobs are being created. And, as Dr Mangion said, the banking, financial services and IT sectors are performing well too.

But, in spite of all this, the people are not feeling the positive effects in their pockets, which is ultimately their main interest. Everyone wants to have more money to spend, to be able to live a better life and to give one’s family an improved standard of living. Is this happening? Do people have more money to spend?

This is a plus for the Malta Labour Party and a minus for the Nationalist Party in government. If the country is doing well, and yet the effects of this positive performance are not trickling down to the people, then the people are not really and truly benefiting from such improvements. They might be benefiting indirectly, but people want to see the tangible effects with their own eyes.

This is something that the Nationalist Party must correct to be able to stand a better chance of being re-elected. Whether enough time still remains for this to happen is a different kettle of fish. It all depends on what the government will announce in next month’s budget, and the time that will elapse between the budget and the election.

What the government must also keep in mind is that the switchover to the euro will no doubt be a positive move in the country’s national interest, but there will be real or perceived disadvantages (read a higher cost of living) that will also affect the way people think.

Again, it will be a matter of “national” against “individual” good feeling. If the people feel that the change from the lira to the euro negatively affected their standard of living, then whatever the government says about an improvement in the country’s economy will not be believed.

This is perhaps why an election will be called before the impact – real or perceived – of the changeover to the euro will be felt. And this is perhaps why Opposition Leader Alfred Sant has said that the effects of such a switch will not be felt in the first two, three months but later on, as happened in Slovenia.