A couple of Sundays ago, while attending the opening of a new synthetic turf football ground at Gharghur, I heard the Prime Minister claim boastfully that while European financial markets burnt and other neighbour countries were up to their necks in economic turmoil, in Malta we had it so good that we were able to afford the luxury of spending our weekends opening new football grounds, attending village feasts in ‘all their glory’, bickering in a teasing manner about politics and soccer while life went on in a leisurely manner.
I repeat that was only three Sundays ago or so. Such words worried me then and worry me even more at present because they breed the kind of self congratulatory complacency that does no one any good. The issue at stake in the wake of the recent Moody’s downgrade and European Commission warning to Malta is not whether we could risk suffering from contagion or not. Neither is it a question of whether the eurozone instability has impacted on us or not.
But it far more concerns the attitude we have been adopting all along.
The language government has been talking to try and keep on top (electorally) in the whole situation, as well as its apparent top priority – that of blaming the country and the people at large for what has been happening without realizing that some of the ‘sins’ committed were of its own doing.
The same government that has been repeatedly asking the PL to pre announce its post electoral plans, has been accused in no uncertain terms by both Moody’s and the EU Commission of still being unclear as to what paths it intends to pursue as well as which options it is likely to go for.
There is a yawning gap between the tactical approach of an Opposition Party that is already drawing up its strategies for the future but wisely keeping its cards close to its chest not to experience the same strategic shortsightedness of the past, and that of a government that is creating uncertainty in real time as a result of the hazy manner in which it is conducting its own business.
Rather than having the PM react instantly to the Moody’s downgrade – it took him almost three whole days to utter a word! – the PN was far more interested in instantly dismissing the PL’s criticism over Moody’s downgrade as puerile and pointless. All were in an agreement – except for Government – that the PL had reacted in a rather sober and muted manner that was bereft of the type of arrogance that traditionally characterizes Government statements.
In spite of the fact that until recently the Finance Minister was reassuring us that we were almost immune from goings on nearby, and that a financial meltdown in Italy would not necessarily impact on our small island, we are now being told – as part of the damage limitation exercise to contain the Moody’s fall out – that the economic realities unfolding nearby are having a direct impact on Malta’s open economy and that Malta happens to be surrounded by choppy economic waters, market unrest and political turmoil in the Arab world.
This bit about the Arab world must have given a boost to the local tourist sector as has happened in Spain already. But then this is the puerile and apologetic thinking of the Gonzi regime.
Following are the reasons why in my opinion Government is indeed in denial as confirmed by the recent Moody’s and European Commission reports on Malta’s finances and economy. By the way these are the same people who have been calling on one and all – except themselves –to brush petty partisan politics aside and to get our act together to ensure further ‘successes’ for Malta.
Moody’s not only downgraded Malta but they spoke clearly about how our lower medium term economic growth rates could leave us at risk for further economic shocks. Not a word by government on that point!
Rather than admitting that a change of direction was needed, both the Prime Minister and the Finance Minister hinted that they would stick to their guns. As well as that it would – in their own words – be highly imprudent to try and steer government’s economic and financial management policy away from its present path.
When PL MEP and seasoned economist Prof Edward Scicluna revealed how revised NSO figures had shown that Malta was worse hit by the financial crisis than believed, Government reacted by resorting to its feeblest card – stony silence.
One moment the PM commented boastfully according to economist Lino Spiteri in a manner that ‘oozed self confidence to an extent that verges on delusion and arrogance’ that it would do the same things all over again. Only for his government to shift its stance a few moments later by stating that while taking note of Moody’s concerns, the government is committed to take all necessary action to strengthen and ensure the country’s economic and financial stability.
The whole notion of savings jobs was brought up as an excuse to justify the fact that the economy contracted much more than it was thought to have during 2009 when various indicators show that there is far more to it than this over simplistic interpretation.
While the PL was the first to admit that part of the situation was dictated by the international financial instability, and that ‘nobody is denying this’ Muscat also emphasized that the Moody’s report also threw considerable emphasis on the way the country is being managed. Government was lost for words in the light of this accusation.
There was just as stony a silence when we were reminded by Moody’s that government had frequently resorted to one off measures to try and balance the books – something which according to Moody’s (and common sense itself) is both unsustainable and not part of a long term economic vision.
Government has to be honest even when addressing itself. Are we likely and or potential victims of contagion or have we – as government implied – solved all of our contagion ills?
To try and give people the false impression that we can keep the external shock waves from rolling up our economic shores – as Lino put it – says more about Government’s false sense of security than of our own dire economic and financial situation.
Since Government has already swung into a pre electoral mode it is trying to get the electorate to put blinkers on by holding back from admitting that the downturn in economic activity elsewhere does in actual fact increase the risk of further blows to our economy.
Ironically while the PN have chosen a Gensna like mantra to try and exude confidence among the electorate on the trust and confidence it has in the people’s in built resilience as the main theme of its Independence celebrations, the Finance Minister recently showed a lack of confidence in the Maltese people by hinting at a political conference that Moody’s rating was not a rating of the government, but of the state of the country.
This is typical indeed of a Gonzi administration.
Last week we were told that Malta’s real challenge in the current economic scenario is to reduce our level of public debt.
How will government react to that?
Most probably with the same indifference as it reacted to the EU Commission report that forecast and spoke of very low consumer confidence while predicting that this would all have a knock on effect on our private consumption, external deficit and unfavourable terms of trade.
We are also awaiting government’s comments as to how Air Malta’s restructuring may entail further government expenditure and push both deficit and debt projections upwards, while some two thirds of the imminent decline will be due to the expiry of temporary measures adopted in the 2010 budget.
Talking of plans, would it not make more sense for government to tell us what its real plans are for the immediate future, rather than getting its fatly paid communications gurus chase the PL to unravel its plans when/if elected to lead the country next time round?
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Leo Brincat is the Shadow Minister for the Environment, Sustainable Development & Climate Change