Tragic not just serious!

The Malta Independent

Tragic not just serious!

The government is in crisis.` Economic growth has practically disappeared. Inflation is edging up, foreign reserves are falling and all business sectors are in a state of shock preparing for the unavoidable to happen.

Politically government finds itself pursuing a dream it cannot fulfil as the remaining` term of its` mandate is too short to execute EU membership. In any case a gloomy economic environment does not augur well for a positive referendum result.

Morally the government has lost all credentials.` Probably it never had them in the first place considering its mandate is based on a manifesto of clearly undeliverable pledges. The` magisterial investigation into the alleged sexual offences of a senior police official is political dynamite. What started as a normal case of human frailty is turning into an alleged` cover-up and abuse of the power by the Head of Police and Secret Service and insufficient precautions by a forewarned Prime Minister to ensure that such abuse is not resorted to.

On the financial front the panic is ominously evident. Schemes are invented out of thin air, the much desired bi-parliamentary approach is simply forgotten, and a foreign deposit repatriation scheme is announced without details even though it officially started on the 1st September.

Even junior economic students would suggest that the best way to motivate repatriation of foreign capital is to build a strong and vibrant domestic economy` permitting fair returns on capital without undue risk of devaluation whilst offering` gentle tax treatment.` The Minister has forgotten these elementary economic basics and pretends to stimulate repatriation by threats of having international tax cops at his fingertips.

On the monetary front the Central Bank has given its supposed independence a holiday.` Forgetting that the IMF had specifically warned, less than one month earlier,` that domestic interest rates should not be lowered before reserves are re-built, ignoring that domestic inflation is edging up and is likely to do so more` pronouncedly if energy prices are allowed to fluctuate with market forces as from next year, ignoring that public finance deficit is clearly not being reined in, the Central Bank puts aside its primary mission of price stability and lowers interest by a quarter point, delighting the largest borrower around, i.e. the government.

Any tool to divert public attention from these serious issues comes handy.` In long standing political tradition of hiding your defects by pinning them on your opponents government press has spent the good part of the last two weeks inventing that I am` at odds with Labour Leader Sant and Shadow Finance` Minister Brincat.

Reality is that where my views differ from those of the two gentlemen is that whereas they think the economic situation is very serious my opinion is that it is tragic. Not a division worth shouting about from the PN`s flank.