The study made by a panel of unnamed economic analysts on the credit boom experienced in Malta during the 1990`s asks in the title the question whether we are living beyond our means.
Unfortunately the study itself stops short from answering its own question.` It amasses data which seem to point to sectorial evidence that this could be the case, but does not make the case for or against its own question in a distinct manner.
I propose to attempt an answer.` The country is not yet living beyond its means. But unless it changes course it is heading there and fast. `The national debt has doubled these last 5 years and is still growing alarmingly both in absolute and relative terms`
The test that a country is living beyond its means is structural balance of payments deficit (on current account) and regular recourse to foreign borrowings from banks or in the final analysis from the IMF.
Much as the economy has problems, thankfully foreign borrowing is not amongst them.` Our balance of payments has not developed any structural deficit on its current account and the country has not been forced to seek foreign borrowings.
Certain sectors of the economy are indeed living beyond their means but they are neutralised by other sectors that are still saving and providing internal sources of financing, protecting the country from the need to tap foreign borrowings.
The sectors living beyond their means are very easy to identify.` First and foremost is the public sector.` The government has been running budget deficits since the mid-80`s but the situation has aggravated structurally since 1996 when the public deficit rose to high percentages of the GDP.` The national debt has doubled these last 5 years and is still growing alarmingly both in absolute and relative terms. And this does not include about half a billion liri in other hidden debt - through guaranteed bank loans against which the government annually has to provide for the interest charges or financed out off the budget through the Treasury Clearance Funds.
Anybody who optimistically assumes that the government is addressing the situation need only look to the August public finance figures just published to see how wrong he or she is.
The Table below shows that the government has lost control of its finances and the real deficit has increased from Lm55 million in the first 8 months of 2000 to Lm100 million in the first 8 months of 2002. This after adjusting the Lm21 million MIA extraordinary revenue but without adjusting the Lm7.5 million special one-off revenues from the Investment Registration Scheme. The deficit in reality has doubled over what it was in 2000.
January - August
1998 1999 2000 2001 2002
322 357 396 417 448
less MIA extraordinary item
Net ordinary Revenue A 322 357 396 417 427
319 345 361 385 419
Public Debt Servicing
36 42 46 46 49
40 59 51 63 65
Total Expenditure B 395 446 458 494 533
less Contribution to Sinking Funds
and loan repayments
included in Public Debt Servicing C 7 7 7 6 6
Structural Deficit A-B+C -66 -82 -55 -71 -100
Central Government Debt
740 812 905 1,007 1,031
Now August, one of the high revenue generating months as it includes one of the three annual provisional tax payments, is captured by the statistics and the seasonality argument, never strong, now disappears. Even taking August alone as a month the deficit for the month increased from Lm4 million last year to Lm7 million this year. Even in a strong revenue-generating month the government still registered a growing deficit.
`Although no statistics are available one could also make the strong case that private consumers under the age of thirty are living beyond their means` And yet the government has no problem in financing its deficit or rolling over its maturing debt. It is doing away with all sinking fund provisions for new or rolled-over local debt on the assumption that the debt need not be repaid but simply extended into infinity. Indeed it is succeeding to do so at lower interest rates as local investors have little other opportunity for investment having been hurt so much by losses on equity based investments these last three years.
Which basically confirms that whilst the government is living beyond its means the country as whole,` thanks to the culture of thrift inherited from our fore-fathers, is handling the situation without any crisis similar to that of Latin American countries who had to finance externally all their debts because of the traditional instability of their financial systems.
Although no statistics are available one could also make the strong case that private consumers under the age of thirty are living beyond their means. With public transport offering no real solutions for the demands of` their life-style, and with the government withdrawing completely from the provision of social housing for first time home-buyers (gone are the days when young couples could build their house on a few hundred liri plot from government or could rent an apartment for less than Lm100 p.a.) young adults have no alternative but to take on debt which is thankfully financed internally from the savings of the older generation through the intermediation of the banking system.
`It calls for banks, when considering credit programmes, to become less reliant on security and more on projected cash flows` So my conclusion is that there is hope.` Provided we turn course before it is too late, before more debt accumulation challenges the ingrained trust in the financial system consequentially leading to flight of capital, before interest rates overseas move up with the economic cycle, this country can be saved from the economic and financial distress that otherwise awaits it.
Finally the said study is critical of banks for over-lending in certain sectors leading to the current high provisioning for non-recoverable debts and high ratios of non-performing loans. It calls for banks, when considering credit programmes, to become less reliant on security and more on projected cash flows.
It is dangerous to make such recommendations without taking into account local reality.` Firstly it is quite normal and obvious that in an economic downturn banks have to increase their provisioning levels and like the rest of the economy see their profits suffer. Still HSBC have registered increased profits and BoV still returned very respectable performance. Secondly the definition of non-performing loans is becoming more rigid to follow Basle standards; so comparisons with past levels when the definition was more relaxed are unreliable.
Finally, in a micro-economy where bank lending remains the main source of business finance, it is dangerous if the banks were to shy their economic responsibility and follow the HSBC example.` If in the past banks had adopted such an approach does anyone think that we would today have projects like Portomaso, the hotels of Corinthia, Island Group, various car parks, entertainment and commercial centres` Obviously some risks had to be taken and in certain instances it is quite normal that risks turn to failures. But in the majority of cases the bank lending delivered in everybody`s interest (1) .
Note 1: This is not to excuse a particular case like Daewoo where the bank lent way beyond the limits of prudence without any economic justification for the risks involved. This case cannot but give rise to claims of political interference. The call for a special independent enquiry of this case remains justified and sooner or later it will be made.
Monday, 30 September 2002
Sunday, 29 September 2002
Rebha elettorali ghal Partit Laburista fl-elezzjoni li jmiss hija bzonn. Bzonn ghal pajjiz, bzonn ghal partit u bzonn` ghal dawk il-Maltin ta` rieda tajba li jixtiequ jkomplu jahdmu u jghixu f`pajjizna fis-sliem u fil-galbu.
Hafna huma konxji li l-gvern prezenti ghejja. Jafu li dal-gvern tajjeb biss biex jonfoq u jpacpac. Dment li wiret pajjiz bla dejn u b`ekonomija b`bazi soda kien jidher li qed imexxi sew ghax kien hemm minn fejn jonfoq u fuq x`hiex jonfoq. Izda issa li nefaq ir-rizorsi kollha li kien halla gvern laburista,` issa li mliena sa xfar ghjanejna bid-dejn, issa li kwazi biegh l-assi kollha tan-nazzjon,` ma fadallux minn fejn jonfoq.
`Anke mil-lat poltiku hija biss rebha laburista li tista` tiskansa lill-pajjizna milli jerga jinxtorob mill-pajjizi kbar u milli jkompli jizzerzaq lejn stat ta` neo-kolonjalizmu.` Ghalhekk dar fuq it-taxxi li qed jghakksu lil baxx u lill klassi tan-nofs, li qed jghollu l-hajja l-aktar ghal minn huwa bil-paga jew b`pensjoni fissa u qed igerrxu investiment gdid li jista` jaghti hajja lill ekonomija.
Meta nitkellem ma imprendituri serji bla tlaqliq jghidu li fic-cirkosrtanzi li jinsab fihom il-pajjiz illum lanqas jekk trid tinvesti ma tista`. Il-burokrazija u l-korruzzjoni tant jaghmlulek ostakoli li trid tkun minn ta` gewwa sew biex tmexxi `l quddiem xi progett bla ma jkollok biza` li ssib ostakli artificjali biex ikollok ixahham ha tmexxi.
Anke mil-lat poltiku hija biss rebha laburista li tista` tiskansa lill-pajjizna milli jerga jinxtorob mill-pajjizi kbar` u milli jkompli jizzerzaq lejn stat ta` neo-kolonjalizmu.
Ghal grazzja t`Alla donnu kullhadd qed jaqbel issa li jekk Malta tidhol bhala membru shih fl-UE skond ir-regoli ezistenti nispiccaw is-seftura ta` l-Ewropa. U tabilhaqq hekk hu.` U hija tassew hasra li n-nazzjonalisti tant dahhlu qtiegh il-qalb fil-pajjiz li sar hawn nies li tant tilfu l-fiducja li dan il-pajjiz jista` jitmexxa minna stess bil-galbu u bis-serjeta`, li donnhom jippreferu li nsiru sefturi ta` l-Ewropa.
`Irridu kemm jista` jkun malajr inkunu gvern li johloq il-gid sostenibbli fil-pajjiz, mhux il-gid temporanju li jigi mid-dejn jew mill-bejgh tal-privatizzazzjoni, halli bhal ma kienu jaghmlu gvernijiet laburisti ta` qabel flok taxxi nqassmu gid u sostenn,` specjalment lil dawk fis-socjeta` li l-anqas jistghu jghinu lilhom infushom` Il-Partit Laburista irid jipperswadi lil nies bhal dawn li l-fatt li n-nazzjonalisti mexxew lil pajjizna tant hazin li wassluh f`xifer ir-rovina ma jfissirx li l-Partit Laburista fil-gvern se jkompli fl-istess triq. Altru! Irridu nipperswaduhom li ahna kapaci ndawwru r-rotta. Li kapaci li bil-prudenza, galbu,` serjeta u onesta,` naghtu lil-pajjiz il-medicina li ghandu bzonn ha jfiq kemm jista jkun malajr, halli nergghu naqbdu it-triq tal-progress veru mibnija fuq il-bzulija u l-efficjenza.` Is-serjeta ggib il-gid.` U l-gid igib il-progress veru.
Irridu kemm jista` jkun malajr inkunu gvern li johloq il-gid sostenibbli fil-pajjiz, mhux il-gid temporanju li jigi mid-dejn jew mill-bejgh tal-privatizzazzjoni, halli bhal ma kienu jaghmlu gvernijiet laburisti ta` qabel flok taxxi nqassmu gid u sostenn,` specjalment lil dawk fis-socjeta` li l-anqas jistghu jghinu lilhom infushom.
Lil- familji bi bzonnijiet specjali, dawk li ghandhom il-mard u single parents, lil-pensjonanti li qed ibaghtu jaraw li jkollhom jonfqu bicca sew mil-pensjoni taghhom f`medicini li l-gvern ma ghadux jipprovdi b`xejn waqt li l-gholi tal-hajja fil-qasam ta` l-ikel u tal-medicini jkompli jikkarga.
Hemm bzonn rebha laburista anke ghal partit. Partit politiku jilhaq l-iskop ahhari tieghu billi jkun fil-gvern.` Mil-gvern biss jista jwettaq il-policies tieghu halli jilhaq l-ghanijiet li ghalihom jezisti. Mill-oppozizzjoni ir-rwol li jista jaghmel parit politku hu dak ta` limitazzjoni tad-danni izda ma jistax jizvolgi rwol li jizviluppa sewwa ir-ruh tieghu.
Jekk tnehhi it-22 xahar tas-96/98 tista`tghid li sal-elezzjoni li gejja inkunu ilna sittax il-sena fl-oppozizzjoni.` Wara 16 il sena fil-gvern ghamilna 16 il-sena fl-oppozizzjoni. Altru li wasal iz-zmein lil-partit jerga` jsib ir-rwol veru tieghu fil-gvern biex minn hemm jista`tassew jiddefendi l-interessi tal-klazzi li jirraprezenta ` lin-nies tax-xoghol, dawk li jghixu minn hidmithom. `Lil min ma jistax jaccetta dan it-twemmin, filwaqt li nibqghu grati ghal hidma passata, ikollna nibqghu inhobbuh mil-boghod ghax kif jghid l-ingliz once bitten twice shy.`
Ghamilna hafna xoghol waqt li qeghdin fl-oppozizzjoni. Ghandna kwartieri, ghandna mezzi ta`komunikazzjoni,` sebbahna u sahhana ic-centri lokali.` Izda bhal ma jghid l-ingliz dawn huma biss a means to an end.` L-ghan ahhari huwa li dawn iservu biex jghinuna nirbhu lelezzjoni. Ma jistghux u ma ghandhomx ikunu ghan fihom infushom.
Mela kull haga li tista ttellef il-prospetti tal-partit li jirbah l-elezzjoni li gejja ghandna nistmerruwha. Ghax il-Partit mhux il-gebel jew il-media.` Il-Partit huwa n-nies, il-faxx kbir ta` haddiema li jehtiegu sostenn biex bil-partit taghhom fil-gvern mhux biss johloq il-gid izda li jqassam dal-gid skond il-gustizzja socjali. Dawk huma il-veru Partit Laburista.
Dawk huma akbar mil-mexxejja tal-passat, tal-prezent u tal-futur. L-interess ta` dawn huwa superjuri ghal kull interess iehor. U l-interess ta` dawn jitlob lil-partit jahdem maghqud b`ghan wiehed li fl-elezzjoni li gejja jakkwista l-akbar rebha li qatt kellu l-Partit Laburista.
Lil min ma jistax jaccetta dan it-twemmin, filwaqt li nibqghu grati ghal hidma passata, ikollna nibqghu inhobbuh mil-boghod ghax kif jghid l-ingliz once bitten twice shy.
Friday, 27 September 2002
The Malta Independent
The reform of the Common Agricultural Policy (CAP) so much necessary to conclude the budgetary arrangements for EU enlargement seems to be sailing into troubled waters.
Seven EU farm ministers, led by France, launched a frontal attack on the reform proposed by the Commission to permit new candidate members, especially those with large agricultural sector, to participate, albeit limitedly from the benefits of CAP.
CAP subsidies still absorb half the EU budget.` More than that it inflates the consumer`s cost of living and makes mockery of the WTO objectives to open up markets for free trade, permitting poorer countries to eradicate poverty by providing them with open markets for their agricultural produce. ` The Financial Times this week editorially labelled GAP as an extravagant folly that neither Europe nor the world can afford`
Not only this does not happen, but also the EU still produces structural surpluses of dairy produce and sugar, which are then placed on the international markets at heavily subsidised prices.` This depresses markets elsewhere and offers unfair competition to poorer agricultural based economies.
The Financial Times this week editorially labelled GAP as an extravagant folly that neither Europe nor the world can afford.` It pays big farmers subsidies for not producing, enriching them at the expense of the small producers it is supposed to help.
But as an outside country with a small agriculture base we have the best arrangement through the facility of buying surplus EU commodities at subsidized prices.` We benefit and take advantage of the EU CAP folly.` The moment we join EU as members we would not only give up this facility but will be forced to join the CAP folly having to buy such basic commodities at high internal prices so that the rich farmers of northern Europe could be subsidised at the expense of the Maltese consumer.
`We will be moving from the best position to the worst possible position saving only in the small subsidies hitherto allowed to local farmers for their cash crops but paying much higher protection levies to European farmers.` We will be moving from the best position to the worst possible position saving only in the small subsidies hitherto allowed to local farmers for their cash crops but paying much higher protection levies to European farmers.
The benefit of staying out is clear and immediate.` It is continuing to take advantage of the EU farm folly rather than become part of it. But our Minister for Foreign Affairs is not sufficiently realist to quantify the cost of giving up the existent benefit.` He does not even concede that inflation induced by the application of CAP could weaken our international competitiveness.
Incredibly he accuses Labour that we are stuck in time basing our economic development on cheap Labour and promising us showers of foreign direct investment for the simple reason that we can present EU membership in our credentials.
May be now that the bubble of the shower of EU funds has been burst those who have only empty platitudes to justify their obsession for EU membership will switch their tack to a shower of foreign direct investment.` Somebody however has to explain to me why foreign investment would come here if we offer the same menu as other member countries plus added shipping costs.
The Financial Times ended the editorial in criticising the French-led position on CAP reform by stating that perhaps it is really true that those whom the gods wish to destroy, they first send mad. It applies here as well
Thursday, 26 September 2002
The Times of Malta
It`s official now; funding is no good reason to join the EU in membership.
All studies made by PN exponents to justify the pro-membership stance have always used funding as a main reason for their position. Starting with the study conducted by Josef Bonnici and Michael Frendo in the late eighties for the Chamber of Commerce right up to recent study made by Prof Lino Briguglio for the UHM, the funding case was made in no uncertain manner.
In an interview given in 1997 by the current Head of MIC, then president of the European Movement, he made the case that using Slovenia as a benchmark, Malta would be due to receive Lm100 million p.a. if the then Labour government had not frozen the EU application. On being quoted later he explained that his argument was that Malta would get such funds upon membership not in the accession stage. `The famous declaration of 16th August 1998 in a PN electoral campaign mass meeting that Labour`s non-membership policy has denied country Lm100million p.a. in EU funds still rings loud and hardly needs any reminding.`
The famous declaration of 16th August 1998 in a PN electoral campaign mass meeting that Labour`s non-membership policy has denied country Lm100million p.a. in EU funds still rings loud and hardly needs any reminding. But one ought to remind readers that even after the election,` Dr Joe Borg now Minister for Foreign Affairs, then Parliamentary Secretary, was bullish that even in the pre-accession stage, Malta would receive financial assistance four, five or six times what it used to receive under the financial protocol which was not renewed due to the membership negotiations.
In April of last year I made the point that MIC was making a misrepresentation when categorically certifying that Malta would be entitled for the highest level of funding under the EU`s Structural Fund without pointing out that (a) statistics collected by Malta was based on` an old methodology which might impede such entitlement when up-dated (b) calculation had to be based on an EU of 25 not of 15 (c) budgetary provisions beyond 2006 will be decided only after Malta had already taken the irreversible step of joining in membership. Taking all this into account I made the argument that funding could never be a reason for joining the EU.
All hell broke loose.` I was criticised by a chorus of Ministers including the Prime Minister, the European Movement and of course MIC. All those who were embarrassed by not delivering on their promise of pre-accession funding were not prepared to let anyone throw any doubt on our entitlement after membership.
In reply to all these I stood my ground and suggested to stand the test of time. Now time has spoken. Under whatever scenario, funding can never be a good reason to join in EU membership.
Now that one of the main pillars of the pro-membership case has had to bite the dust, what else is left to justify the government`s rigid position in favour of Malta joining the EU in membership Basically what remains is the argument of inevitability. `Under whatever scenario, funding can never be a good reason to join in EU membership.`
Inevitability is that this is something beyond us; that it is an appointment with destiny regarding which we should use faith not reason. It goes that once almost everybody else has either joined or is waiting to join there is nothing to argue about. That our economy will never receive the shock therapy it needs unless this is forced upon us by the EU, as our political system does not allow our politicians to take the necessary but unpopular measures. That foreign investment will continue to escape us unless we can present ourselves with the credentials of EU membership.
The government has one thing working in its favour to strengthen the case for inevitability. The more it mismanages the economy, the stronger the case for inevitability becomes. It is ironic that the case for membership has now become totally dependent on government`s own incompetence.
The argument goes that because the government is incompetent, we must necessarily assume that all future governments will also be similarly incompetent and do not deserve to be given a chance to prove otherwise. So joining the EU has become an intractable mission to protect us from our own incompetence. `It is ironic that the case for membership has now become totally dependent on government`s own incompetence`
This is indeed pitiful. The case for non-membership is based on serious assumptions that we, and only we can turn the economy around, through the necessary measures that we take for ourselves. Just look at regions in the EU that although having been in membership for more than 40 years still suffer economic dereliction in spite positive funding.
In order to pull ourselves from the problems we have been landed in, we have to devise a strategy based on differentiation, flexibility and leverage.` Differentiation in acknowledging that we are a micro peripheral economy.` Flexibility in that we have to be quick to use our differentiation for our benefit and to keep adapting it to remain competitive as the external environment changes. Leverage to ensure that we use our geo-strategic political assets to a prudent maximum in negotiation with other economic blocks.
These very issues of differentiation, flexibility and leverage are excluded from the EU membership policy which ought to make the argument of inevitability as weak as the argument of funding. Similarly the argument of inevitability should be made to bite the dust.
Monday, 23 September 2002
Presently I am reading a book titled “When Genius Failed” that gives a detailed account of the rise and fall of LTCM between 1993 and 1998. It describes how the Russian default in August 1998 ignited a global run to quality that nearly brought the collapse of the entire financial system as all investors rushed out at the same time and could not go through the narrow door without fatal consequences.
“The equities listed on the MSE have taken a beating especially during September.”
The international investment world is currently going through a somewhat similar experience. Investors are rushing to quality abandoning equities and low-grade bonds and taking shelter in qausi cash investment and quality investment grade bonds. Security is attracting priority over the return expectations.
The problem with such tricky situations is that so much depends on confidence that a prospect of a crisis could itself become a self-fulfilling prophecy. And this grave risk is prevalent in
The equities listed on the MSE have taken a beating especially during September. The return from summer holidays has brought only sellers to the market. The index has now fallen nearly 25% this year, which added to the losses experienced in 2000 and 2001 cannot but weigh on consumer sentiment impacting the overall economy.
“If the directors of listed companies really believe that their companies are worth more why not put their money where their mouth is and buy back their own shares at bargain prices”
The culture of share ownership in foreign countries much pre-dates the local one. Foreign investors who are being hurt by the downturn probably enjoyed the good times of the 90’s when stock exchange indices skyrocketed. Consequently many foreign investors are only giving back what they had previously gained; serious but not disastrous.
Many local equity investors, on the contrary, entered the market after it had peaked towards the end of 1999 and the year 2000. Daily I hear of painful stories of how unsophisticated investors who had no idea of the risk involved in investment equities were persuaded by young bank front-liners, especially in the first half of 2000 when new equity – based investment products were launched, to switch their hard-earned savings to equities, directly or through collective investments schemes, on the premise that their successful run of 1999 could be perpetuated into the future.
Which means that many local investors have only the pain to show for their equity investment on the Malta Stock Exchange and they are probably all rushing through the exit door causing prices to fall well beyond their fundamental values. We have reached a stage where certain equities are nearly on par with their Net Asset Value in spite of the fact that the listed company returns a double-digit percentage profit on its equity base. A stage where the dividend payout is higher than the interest rate obtainable from short-term liquid investments.
There are two schools of thought on how to address the situation. The laissez faire school favours the do nothing approach. Let the market take care of itself. Finally they argue that prices will fall to a level low enough that real professional investors will not resist the bargain and the buying begins. In the process, unsophisticated investors will get burnt out, killing the dream of having a culture of popular share ownership and needing years to re-build confidence in the markets.
If the directors of listed companies really believe that their companies are worth more why not put their money where their mouth is and buy back their own shares at bargain prices. This is especially so where the companies are cash-rich and do not have immediate investment plans giving better value for their liquid resources.
I consider that even small buy-back programmes would be enough to send a signal to mad rush out of equities that investors ought to reconsider. It will bring back sobriety to the market. The signal buy-backs would send is much more potent than the amount of money which is set aside for such buy-back programmes.
In the interest of the small investor and the long-term health of the market, management of quoted companies have to stop sitting on their hands whilst watching their shareholders value melting away.
Fl-ahhar artiklu tieghi tat- 28 t`Awissu 2002 bit-titlu L-anniversarju tal-mitt miljun kont ktibt hekk:
Izda l-pronostici ma jippuntaw lejn l-ebda mitt miljun.` Tant li l-Kummissjoni qalet li hemm probabbilta` mhux zghira li minhabba il-mekkanizmi tal-pagamenti li timxi bihom l-UE hafna pajjizi godda aktarx li fl-ewwel sena sentejn ikollhom jaghtu aktar milli jdahhlu.` Tant li weghdet li biex dan ma jsehhx ghandu jinstab mekkanizmu li ta lanqas il-pajjizi membri godda jigu newtrali ma l-UE, jiehdu lura almenu kemm ikunu hallsu.` Altru milli ser niehdu xi mitt miljun!
U fuq kollox il-budget ta` l-UE iwassal biss sa l-2006. Wara din id-data iridu jsiru negozjati godda li jafu jibdlu kollox ta taht fuq. Il-Germanja ghamlitha cara li ma ma tridx tkun hi li tkompli ggor il-piz finanzjarju l-kbir. Pajjizi ohra li sal-lum qed jiehdu fondi ma tantx se jcedu malajr biex dak li jiehdu llum jibdew jehduh membri godda
Gara ezatt kif kont ghedt.` Hareg rapport li juri li Malta bejn is-sena 2004 ` 2006 bhala membru shih fl-UE mhux tricievi il-flus izda jkollha thallas medja ta` 29 miljun Euro kull sena jigifieri 88 miljun Euro fi zmien tlett snin ekwivalenti ghal madwar Lm35 miljun. `Fl-ewwel tlett snin fl-ahjar ipotezi ma nhallsu xejn u fl-aghar ipotezi mhallsu Lm35 miljun`
Hemm ukoll weghda li l-Kummissjoni ser tithabat biex iddahhal mekkanizmi godda halli dawn il-flus troddhom lura biex il-membri l-godda ma jigux ihallsu mil-bidu. Din hija biss weghda li tehtieg l-approvazzjoni tal-Kunsill tal-Ministri li tista` tigi u tista` ma tigix.
Issa car. Dik hi `rejalta. Fl-ewwel tlett snin fl-ahjar ipotezi ma nhallsu xejn u fl-aghar ipotezi mhallsu Lm35 miljun. Dawk huma l-parametri. Ma hemm l-ebda Lm100 miljun kull sena lanqas meta nsiru membri. Il-bziezaq qed jinfaqghulhom kollha. Dahqu bil-poplu.` Imisshom jisthu.
Tahtt it-titlu `What Funding kont ktibt artiklu fit-Times fil-25 ta` Mejju 2001 u kont ghedt ezattament hekk:
It is easier to quantify how much it will cost than to estimate how much we will get and under whatever scenario the net balance, as a country not simply as government, will be from neutral to` negative.
Huwa ehfei tikkalkula kemm se tqumilna milli kemm se ndahhlu (biex nidhlu fl-UE) izda taht kull suppozizzjoni il-bilanc` net bhala pajjiz u mhux biss bhala gvern se jkun min-negattiv sa newtrali.
Il-Prim Ministru u diversi Ministri tal-gvern kienu hargu jikkritikawni talli kont qed naghmel tbassir bhal dan.` Il-Ministru Michael Refalo mar oltre.` Kien qal li jien qed immur kontra l-interessi tal-pajjiz ghax ninfluwenza lill-UE biex ma jtunix fondi. Ara naqra jekk decizjoni bhal din hux ser tittiehed fuq dak li jghid xi hadd, hu min hu, hawn fostna. `Il-fondi qatt ma huma raguni ghala Malta ghandha tissieheb fl-UE. Dahqu bil-poplu dawk li weghduh il-fondi.` Sta ghal poplu li ma jhallix min jidhaq bih izjed.`
Iz-zmien l-akbar gharef.` L-argumenti u il-kalkoli ta qabel ma jigu` jiswew xejn.` Iz-zmien qed jaghti risposta semplici. Flus mhux gejjin zgur fl-ewwel tlett snin. Anzi hemm cans li jkollna nhallsu` u mhux nithallsu.
Ibqghu zguri li minn hawn u ftit iehor hafna professuri jibdew jaghmlu kalkoli ta` kemm ser indahhlu wara l-ewwel tlett snin. Issa li z- zmien tahom risposta dwar min kellu ragun rigward il-fondi fl-ewwel tlett snin,` tistghu tlestu biex tisimghu hofna filosfi jispjegaw kemm ser indahhlu fondi mill-2007 `l quddiem hekk kif il-mekkanizmi tal-pagamenti jduru favur taghna.
Zommu f`raskom din. Il-budget ghal wara 2006 ghad irid jigi miftiehem u d-diskjussjoni dwaru ma tibdiex qabel 2005, jigifieri sena wara li suppost inkunu ga membri. Ser ikun hemm tibdil kbir dwar il-fondi ghax min qed ihallas ma jridx jibqa` jgorr il-piz u min qed jithallas ma jridx jitlef milli ghandu. Id-decizjoni dwar dan suppost li ghall-ahhar darba ssir bl-unanimita` izda min jaf kif ser jinbidlu l-affarijiet mill-lum sa dak in nhar meta nafu li ghad trid ssir konferenza intergovernamentali ohra li aktarx tressaq il-mudell ewropew lejn il-federalizmu`
Meta jigi biex jigi deciz il-budget ta` l-UE` ghal wara 2006, anke jekk tkun membru il-vot ta` Malta jaf ikun bla sahha u rridu noqghodu ghal dak li jiddeciedi min hu b`sahhtu hafna aktar minnha.`
Il-fondi qatt ma huma raguni ghala Malta ghandha tissieheb fl-UE. Dahqu bil-poplu dawk li weghduh il-fondi.` Sta ghal poplu li ma jhallix min jidhaq bih izjed.
Sunday, 22 September 2002
The Malta Independent on Sunday
Much as I hate to say it, I can`t resist it - I told you so!
For the last four years following the totally unrealistic and invented claims about our entitlement to EU funding in the pre-accession and post membership phases made prior to last elections, I have been making a consistent and simple argument about such funding.
I have maintained that funding will never be a true and honest reason for joining the EU. I maintained that our entitlement to such funding is very dubious as joining a EU of 25 members or more will reduce our entitlement and comparisons with benefits enjoyed by Ireland and Spain are totally irrelevant.
I maintained that when all is said and done Malta would never come close to the Lm100 million promised before the last elections and on a net basis we could be close to a neutral position. `Unsurprisingly (for me) Malta is expected to be a net contributor to the tune of an average Lm12 million p.a. for the first three years.`
Last year I exchanged extensive public correspondence with MIC, various Ministers and the Prime Minister who came out in force to destroy an argument I made where I guesstimated that in the context on an enlarged EU, Malta could fall out of objective one funding reducing our claim on such funding.
I was accused of a mixture of misrepresentation and incompetence in the subject matter.` Some even accused me of being unpatriotic in trying to influence the EU in denying us the funding we are entitled to! All assured that even in the context of an enlarged community Malta`s claim on generous funding from the EU should not be in doubt.` Min Borg even after the 1998 elections kept insisting that in the pre-accession stage Malta would be entitled to funding four, five, six times the entitlement we used to enjoy under the financial protocols.
To each of these criticisms I had replied holding my ground. However as this was an opinion based on informed estimates, I suggested to let time be the best judge as it unfolds.
`I am eagerly waiting for those who protested against and ridiculed my arguments now to come forward and make their case with the wisdom of the judgement delivered by the unfolding of time.` Time has now unfolded.` The Commission has issued its own estimates of what Malta would be entitled to in the first three years of accession 2004 `2006 under the current budgetary provisions of the EU. Unsurprisingly (for me) Malta is expected to be a net contributor to the tune of an average Lm12 million p.a. for the first three years.
It is pointless arguing whether these calculations include funding under objective one or not. The ultimate crux of the argument is not the technicalities of which programmes we would be entitled to, but the hard reality of how funds much we would effectively pay or receive.
The parameters seem to have been set. It is between being net contributors for about Lm12 p.a. and achieving a broad neutral position if the Commission succeeds in persuading the European Council to approve direct disbursement to new members to compensate for such negative cash flow impact, even if on a temporary basis.
Apologists like Dr Cassola quickly came out to re-assure that Malta would be a net recipient without explaining how and by how much. But in reality pipe dreams and inventions of Lm100 million straight net funding have long been abandoned as having served their cruel purpose in deceiving people into believing that the EU would provide for our living if we join it in membership.
`Let`s become EU members if we so collectively decide.` But let`s not allow such decision be taken on the basis of half-truths and untruths about funding bonanza.` I am eagerly waiting for those who protested against and ridiculed my arguments now to come forward and make their case with the wisdom of the judgement delivered by the unfolding of time. Having lost their case I am sure they can try to play the game again by arguing that in the budget for the years 2007-2012, which Malta as a member will have the right to veto, we will have the opportunity to make up for what we will not be getting in the first three years.
Hope springs eternal.` But having been fed so much empty platitudes about rain of funds from the EU at some point in time we have to get serious and argue with our feet on the ground. The budget for 2007-2012 will not be discussed before 2005, namely one year after we are supposed to have taken the irreversible decision.` By that time the inter-governmental conference due in 2004 and the resulting EU constitution being proposed, could well re-define the voting rights of members, as usual, to the detriment of the small members of the EU. The drive to central decision-making in an enlarged EU is understandable and unstoppable.
Even if we assume that we could exercise our veto on the budget to try to get what we want this government record in negotiating accession terms, to the extent permitted by the acquis, gives little room for hoping that we can rely on generous funding terms. Germany as the major fund provider has already put everyone on notice that they expect the financing burden to be more equitably shared. Spain, the major beneficiary country so far, insisted at Nice on keeping the veto on budgetary decisions for the last time to defend its interest which could be diametrically opposed with that of newly admitted members.
I part with a quote from my reply to Minister Josef Bonnici in April 2001 in the argumentation above referred to. Let`s become EU members if we so collectively decide.` But let`s not allow such decision be taken on the basis of half-truths and untruths about funding bonanza.`
Tmienja u tletin sena ilu Malta saret indipendenti. Lill-Partit Laburista din l-Indipendenza hallietlu toghma morra.
Mhux ghax il-Partit Laburista ma kienx favur li Malta ssir indipendenti. Altru! Izda ghax ried li l-Indipendenza tassew iggib bidla vera fil-pajjiz u mhux semplicement bdil ta` statis politiku li fir-rejalta` izda halla kollox kif kien.
`Il-bidla vera kellha tistenna gvern laburista ta` l-1971 li beda jwettaq dak li kien ried iwettaq kieku id-dnub il-mejjet tas-sittinijiet ma qasamx il-Maltin bla htiega fil-glieda ghall-indipendenza.` Il-bidla vera kellha tistenna gvern laburista ta` l-1971 li beda jwettaq dak li kien ried iwettaq kieku id-dnub il-mejjet tas-sittinijiet ma qasamx il-Maltin bla htiega fil-glieda ghall-indipendenza.
Il-gvern ingliz, li kien hareg bl-irhis sew ma Borg Olivier, kellu jhallas hafna izjed u sar ftehim ta` seba` snin biex issir ristrutturazzjoni ekonomika halli tkun tista` tinghalaq il-bazi militari li konna niddependu tant minnha kemm ghall-impjiegi kif ukoll ghall-infiq u l-kera li konna ndahhlu minna.
Ghalhekk ghal diversi snin sas-1997 kien jigri li l-indipendenza qisha festa tan-nazzjonalisti fil-waqt li jum il-helsien festa tal-laburisti. Sa certu punt ghadu hekk sal-lum.
Nahseb li issa ghadda zmien bizzejjed biex inharsu lejn il-bicca b`mod aktar oggettiv. Xejn ma naqbel li l-Indipendza ghanda tkun il-festa tan-nazzjonalisti.` L-indipendenza la gabuha u lanqas hadmuha ghaliha n-nazzjonalisti.` Sas-sena 1962 in-nazzjonalisti kienu ghandhom jghidu li ghal pajjizna jridu dominion status u mhux indipendenza shiha.
L-indipendenza gabuha dawk il-halliema u l-imdawwlin li dejjem holmu li pajjizna jista` jkun stat Sovran li jmexxi lilu nnifsu.` L-indipendenza hija frott il-hidma u tbatija ta` Mikiel Anton Vassalli, Dun Mikiel Xerri, Manwel Dimech , Duminku Mintoff u ohrajn li hadmu maghhom` li emmnu tassew fil-hila li mmexxu lilna nfusna u kontra kull ostaklu hadmu biex ir-rejalta titwettaq fil-prattika.
Ghalkemm l-indipendenza politika nghatat fil-punt w`id-data li fihom ahna niccelebraw l-anniversju, dan ma jfirrirx li process beda u ntemm dak in nhar.` Il-process kien bdieh Vassalli mal-mitejn sena qabel u ntemm b`mod effettiv bl-gheluq tal-bazi fil-31 ta` Marzu ta` l-1979.
`Sfortunament huwa probabbli li dan huwa l-ahhar anniversarju ta` l-indipendenza qabel ma jsir ir-referendum dwar l-UE.` Ghalhekk meta niccelebraw l-Indipendenza nkunu qed niccelebraw dan il-process kollu li bhala laburisti nidentifikaw ruhna mieghu aktar minn kull haddiehor. Izda jibqa il-fatt li twelid politiku sar fil-21 ta` settembru ta` l-1964.`
Filwaqt li nistmerru lil min wellidna bla ghaqal fix-xewk meta seta bil-ghaqal iwellidna fit-tiben jekk mhux ukoll fit-tajjar, jibqa l-fatt li twelid huwa taghna u mhux ta` min wellidna.`
Ghalhekk f`dan it-38 anniversarju ta` l-Indipendenza huwa doveruz li naghtu gieh lil Malta pajjizna li rriduh jibqa` stat Sovran u indipendenti issa u dejjem.
Sfortunament huwa probabbli li dan huwa l-ahhar anniversarju ta` l-indipendenza qabel ma jsir ir-referendum dwar l-UE.
Jiena nsostni li ma nistax nifhem kif min jippretendi li jiccelebra l-indipendenza qed ghaddej straxxnat biex jikkonvinci lil poplu li l-indipendenza ma rnexxitx u jekk ma nsirux membri ta` l-UE hemm biss ghaks u guh jistenniena. Dan ezatt x`kienu jghidulna dawk li qabel l-1964 ma kienux jaqblu li Malta ssir indipendenti u riedu li nibqghu kolonja ingliza.
Ma nistax nifhem kif tista` tkun kburi bl-indipendenza ta` pajjiz zghir bhalna u mbaghad tkun lest li tissoggettah ghal dak kollu li jigi deciz ghalina minn pajjizi akbar minnha li l-interess taghhom huwa li pajjizna jerga` jibda` jservihom bhala bazi militari. `Ma nistax nifhem kif min tassew ihobb il-pajjiz jista jkompli jumiljah quddiem il-barranin billi l-ewwel icedi dak li ksibna permezz ta` l-indipendenza u l-helsien u mbaghad joqghod jitkarrab biex jiehu lura parti zghira minn dak li kien ga taghna.`
Ma nistax nifhem kif min tassew ihobb il-pajjiz jista jkompli jumiljah quddiem il-barranin billi l-ewwel icedi dak li ksibna permezz ta` l-indipendenza u l-helsien u mbaghad joqghod jitkarrab biex jiehu lura parti zghira minn dak li kien ga taghna.
Dawn li jghixu bis-slogans u bix-xejxi u jaharbu mir-rejalta b`mod kontinwu u perikoluz, jargumentaw li meta is-sovranita` taghna inhalltuha mas-sovranita` ta pajjizi ohra fl-UE b`hekk inkunu qed insahhu s-sovranita taghna. Din tahwida. Meta naghmlu hekk inkunu qed indghajjfu is-sovranita ta` Malta u forsi nkabbru s-sovranita` ta` l-Ewropa. Inkunu qed insiru anqas Maltin u aktar ewropej tant li naccettaw li d-decizjonijiet jibdew johduhom ghalina pajjizi ohra li jiddeciedu fl-interess taghhom u mhux fl-interess taghna.
Jekk tassew in-nazzjonalisti huma kburin bl-indipendenza ta` pajjizna, kif ghandu jkun kull malti li jixraqlu jissejjah hekk, flok ikomplu ghaddejin ha jaghtu t-tmexxija ta` pajjizna lil barranin ghax huma mhux kapci jmexxu,` ghandhom jitolbu lill-poplu Malti jaghzel f`elezzjoni min irid imexxihom.` Jekk il-poplu jaghzel lilhom allura jkun ifisser li l-poplu qata` qalbu li pajjizna jista` jkun indipendenti.
Jekk, kif nemmen,` il-poplu jaghzel lil Partit Laburista ha jmexxi huwa ghandu jithalla spazju biex il-Partrit Laburista jinnegozja l-Partnership ma l-UE li jkun arrangament li jaghmel gieh lil Malta u li tassew jsahhah l-indipendenza politika u ekonomika ta` pajjizna.
Bil-fatti l-Indipendenza ta` pajjizna jemmen fiha il-Partit Laburista.
Friday, 20 September 2002
To my mind, independence and EU membership are mutually exclusive. The very essence of belonging to a bigger organisation with strong political undertones excludes the possibility of sustaining independence of a micro-state at the national level.
“To my mind, independence and EU membership are mutually exclusive”
The concept of shared sovereignty means the dilution of sovereignty at state level for the enhancement of sovereignty at the supra-national level. EU membership will make us more European but less Maltese.
Much as they hate to admit it, supporters of
The substantial changes made to the EU treaties were never presented for ratification by the direct decision of the electorate through further referenda.
In many instances where member countries felt it necessary or were constrained to present changes for the direct approval of the electorate, the approval was not given. The latest example is the Irish referendum vote on the Nice treaty held last year. The Irish decided against it in no uncertain terms. Yet 12 months later they are being forced to vote again on the same treaty even though it has not been subjected to any changes. Obviously if they vote yes this time and start regretting it shortly thereafter, they will never have the opportunity to change their mind about it.
“What in essence those in favour of EU membership are saying in plain and simple language is that our national independence as we have experienced these last 38 years is unsustainable for the long-term.”
So the pooled sovereignty operates to force the national sovereignty to a decision which remains revisable only until it suits the pooled sovereignty interests. At that point the decision freezes no matter what the national sovereignty should think about the consequences.
What in essence those in favour of EU membership are saying in plain and simple language is that our national independence as we have experienced these last 38 years is unsustainable for the long-term.
We are too small to enjoy our statehood and at the present rate we are on self-destruct road under the weight of the dual mountain of debt and debris. We do not have what it takes to govern ourselves with the necessary self-discipline to keep this country economically competitive in a fiercely competitive global world.
To survive in such a competitive environment we need the discipline of a pooled sovereignty arrangement where rules are forced upon us.
As this evening the Prime Minister, the most prominent proponent of the EU membership, gathers his crowds for the customary independence meeting, the real message he delivers is that independence has proved a failed experiment and that a different model is needed to survive, one where we are less Maltese and more Europeans.
I strongly differ. If the experiment failed it is not because the model is defective but because its builders were incompetent or incapable. Indeed this potentially, truly last independence celebrations should serve to prove otherwise. 21 September is our truly national day, provided we still believe in the sustainability of our statehood. Our birth date is what it is and we celebrate it even while cursing the parents who gave birth to this young country among thorns when they could have delivered us at least on straw if not on cotton and velvet.
Monday, 16 September 2002
Throughout last year I made a strong argument that of all the reasons that may exist to support
“In my replies to MIC and to Minister Josef Bonnici, who had joined the choir of criticism against me, I had proposed to let the matter lie and to stand the test of time.”
This criticism hit at the very heart of the government’s case for EU membership. So I was criticised mercilessly from all quarters. MIC made several attempts to discredit my argument. One has to remember that Dr. Simon Busuttil had in 1997 written as president of the European Movement that
“You can expect the government chorus to tell us that this negative funding is only temporary due to timing difference in the payment systems of the EU.”
The Prime Minister also attacked me as alarmist for informing the people that on my best estimates
In my replies to MIC and to Minister Josef Bonnici, who had joined the choir of criticism against me, I had proposed to let the matter lie and to stand the test of time.
So what should we expect? I tell what to expect; and mark my words I will not be wrong. You can expect the government chorus to tell us that this negative funding is only temporary due to timing difference in the payment systems of the EU. They will promise us that after 2006 these payment systems will turn in our favour and we will start benefiting handsomely from EU funds. In short they will once again repeat the slogan FREE DRINKS - TOMORROW.
“Let’s forget about free drinks tomorrow and get some honest, proper and detailed answers today”
We have had enough pies in the skies. Our future depends on us. On our capacity for self-discipline, true leadership, efficiency, quality consciousness, hard work and judicious investments.
Rather than continue chasing elusive butterflies we should attend to more important matters closer to home and start by asking questions which must be answered clearly and unequivocally:
1. Who is taking responsibility for allowing a system where convicted drug merchants organise the importation of drug from their prison cells. Who is resigning for this Columbian affair?
2. Who is controlling the AG in the negotiations of plea bargaining with drug merchants and money launderers?
3. Who is controlling which cases should go forward the whole course of justice and which cases are abandoned for lack of supporting evidence even though the investigating magistrate would have recommended otherwise?
The whole system needs opening up for public scrutiny and fast before we have more scandals, which rock us to ashes. Let’s forget about free drinks tomorrow and get some honest, proper and detailed answers today.
Sunday, 15 September 2002
Qatt ma naf li pajjizna kien f`qaghda daqstant mwerha daqs kemm jinsab fiha llum.
Titkellem ma min titkellem ma ssibx nitfa kuragg.` Minghand il-pubbliku in generali hierga dejjem b`aktar qawwa karba cara. L-gholi tal-hajja qed jifni lil kull min jghix bil-paga u bil-pensjoni. Il-livell ta` l-ghixien sejjer lura u m`hawnx` fiducja li l-affarijiet ser jitjiebu. Anzi, jidher li bi gvern li qed ikompli jahbi u jittraskura l-problemi tal-pajjiz, l-affarijiet ser jehzienu.
`Minghand il-pubbliku in generali heirga dejjem b`aktar qawwa karba cara. L-gholi tal-hajja qed jifni lil kull min jghix bil-paga u bil-pensjoni` Id-deni m`hu tajjeb ghal hadd.` Ikun hafna ahjar ghal Partit Laburista li kieku` meta jmur fil-gvern isib pozizzjoni ekonomika u finanzjarja tajba halli jkun jista jqassam il-gid u jaghmel gustizzja ma min ilu jbati.
Izda donnu huwa destin kiefer li l-Partit Laburista dejjem jidhol ghal piz tat-tmexxija proprju meta l-pajjiz ikun zburzjat.` Hekk gara fl-1971, hekk rega gara fl-1996 u hekk jerga` jigri fl-2003.
Hafna jiftakru is-slogan tal-1971 GVERN FALLUT POPLU BATUT. L-istess slogan jerga japplika illum.
Dan qed nghidu mhux biex naqtghu qalbna. Anzi! Nghidu biex kullhadd jifhem il-bicca xoghol iebsa li l-Partit Laburista ser jidhol ghaliha biex jifdi mill-gdid lil pajjizna mis-saram li dahluna fih in-nazzjonalisti.
Gieli nsib min jghidli imma kif b`dawn il-problemi kollha qed tippruvaw tirbhu l-gvern Mela tridu l-problemi jduru fuqkom u tehlu intom bil-kont ta` l-ohrajn` `In-nazzjonalisti qatt ma emmnu fil-kapacita` tal-Maltin li jmexxu lilhom infushom u li tassew nistghu nkunu stat sovran u newtrali.`
Il-verita` hija li iebes kemm huwa iebes ix-xoghol li ghanna quddiemna id-dover lejn pajjizna jitlob li nidhlu ghalih bil-kuragg u bid-determinazzjoni,.` Ghax jekk ma jkunx fit-tmexxija il-Partit Laburista, n-nazzjonalisti se jwassluna ghal triq wahda.
It-triq fejn pajjizna jigi ekonomikament gharkubbtejh u jerga` jdur lejn il-barrani biex imexxina hu ghax ahna ma nafux immexxu. Ara ma tahsbux li n-nazzjonalisti qed jaghmlu li qed jaghmlu bl`addocc u minghajr skop ulterjuri.
In-nazzjonalisti qatt ma emmnu fil-kapacita` tal-Maltin li jmexxu lilhom infushom u li tassew nistghu nkunu stat sovran u newtrali.` Anke meta accettaw l-indipendenza ghamlu dan ghax il-barrani ridhom jaghmlu hekk biex jehles bl-anqas spejjez.` Kif wera z-zmien ta` wara,` minn l-ewwel gvern laburista ta` wara l-indipendenza, meta l-kontijiet` ma l-Inglizi saru sew Malta dahhlet hafna izjed.` Kien biss ma gvern nazzjonalista li l-Inglizi hargu b`irhis!
U xejn ma nbidel. Ilhom hmistax il-sena fil-poter, mill-1987.` Jekk tisma biex jiftahru n-nazzjonalisti qatt ma jiftahru b`kemm gabu. Dejjem jiftahru b`kemm nefqu.
Tonfoq l-ehfef haga.` Min ma jafx jonfoq Id-difficli li ggib mhux li tonfoq. Jonfoq jaf kullhadd.
Ghax darba fetlilhom jiftahru kemm se jgibu u qalu li se jgibu Lm100 miljun mill-UE waqghu ghac-cajt. Issa anke kieku jgibu Lm100 miljun kull sena mhux xi haga ta` l-iskantament ghax mitt miljun tal-lum, bl-gholi tal-hajja,` bejn wiehed u iehor jigu effettivament daqs kemm jiswew Lm28 miljun li Malta kienet iddahhal mill-kera u mill-infiq tal-bazi qabel l-1979.
`Qatt ma naf li daqs illum il-Partit Laburista jehtieg ikun tarka tas-zghir u l-batut ghax jekk le dan ser jispicca jittallab fit-toroq.` U kull ma jmur kollox juri li dawn il-Lm100 miljun nistghu nroddulhom salib ghal wicchom anke jekk nidhlu membri shah fl-UE. Mhux talli hekk talli jekk mhux mall-ewwel, wara ftit snin, nispiccaw inhallsu aktar milli niehdu lill-UE!! Tajjeb ukoll, apparti li ser naghtu lura s-sovranita` li ksibna b`tant gharaq u xoghol, ser nispiccaw inhallsu flok ihallsuna.
Jekk il-pajjiz jerga` jafda lin-nazzjonalisti fit-tmexxija, pajjizna jista jrodd salib ghal wiccu ghax issa haduna lura sa qabel l-1971 u jekk jergghu jitilghu jehduna lura sa qabel l-1964. B`lura lejn il-futur kif fehemtkom il-gimgha `l ohra.
Ghalhekk iebes kemm u iebes ix-xoghol li se nsibu jehtieg inxammru u nippreparaw ruhna ghalih. U ma naqtghux qalbna.` Ghax il-poplu la tfehmu jifhem.` La tkun sincier u taghmel pjan car li turi fejn u kif se jwasslek ghal hajja ahjar, il-poplu jifhem li biex issolvi il-problemi kbar mhux se tkun xi triq hafifa jew bla skumdita`.` Izda triq li rridu nghaddu minnha biex nifdu lil pajjiz u niggarantixxulu l-helsien u is-sovranita` li ta` qabilna tant batew u thabtu ghalihom.
Qatt ma naf li kien hawn problemi u qtiegh il-qalb daqs illum. Qatt ma naf li Malta kella bzonn tmexxija laburista daqs illum. Qatt ma naf li l-ghazla li ghandu quddiemu l-poplu Malti hija daqstant cara u nkonfondibbli. Qatt ma naf li daqs illum il-Partit Laburista jehtieg ikun tarka taz-zghir u l-batut ghax jekk le dan ser jispicca jittallab fit-toroq.
Friday, 13 September 2002
The Malta Independent
This government is stale.` It is six years beyond its 1996 expiry date. It is still in office, unchanged and unreformed, by the wicked` exploitation of` the weakness of the democratic system ( where one man`s will prevailed on the majority mandate)` in forcing a government with a five year programme to face an electoral test after only 22 months.
Stale products and services no longer perform effectively as when fresh. This applies to bread and meat as much as to shipping bills of lading and government systems.
Stale governments normally expose a common trait.` They become very sensitive to criticism, even the most constructive one. They no longer use reason or logic in choosing right from wrong. On the contrary their main argument becomes` that something is right or wrong because they say so and not because they can positively and objectively prove as much. ` They no longer use reason or logic in choosing right from wrong`
It normally happens after 10 years in power. History is littered with examples even if restricted to the last quarter century. Mintoff fought for democracy like no one else. He brought the universal vote, the penniless and women included, for the vote at age 18, for the right to education, housing and health services even to the least privileged, opened tertiary education to workers families and generally extracted the country from the undemocratic grip of the Church that used to justify undemocratic practices by the promise or threat of what awaits us beyond this world.
He lost two election fighting for democratic principles without giving in to the Church that imposed mortal sin on whoever voted Labour in the elections of 1962 and 1966, the ones just before and just after independence.
Yet` after 10 years in power,` in 1981, he started making his own definition of democracy rather than seeking` a gentlemanly and orderly way to give meaning to the most crucial democratic test ` the orderly alternation of power in accordance with the will of the majority. `His logic is that no one should really analyse and assess such decisions on their own merits but accept them with blind faith simply because they were taken by the Prime Minister`s cabinet`
Margaret Thatcher also presents a typical case study. After 10 years in power between 1979-1989 during which she changed the face of the British economy, she thought she could do whatever she defined as right. Against the advice of friends and foes she introduced the poll tax.` A cabinet revolt forced her to resign.
Our Prime Minsiter has been increasingly using the argument that anything which is discussed and agreed to by Cabinet must be right for the simple reasons that it was so discussed and decided.` His logic is that no one should really analyse and assess such decisions on their own merits but accept them with blind faith simply because they were taken by the Prime Minister`s cabinet.
So we should not question the manipulation of the electoral district boundaries, the loss of audit tools to check the correctness of the electoral register, the granting of presidential pardons in very dubious circumstances or the award of tens of thousand of liri from tax-payers money to colleagues and friends against government policy and without going through the checks and balances of the system.
And even when criticism comes from institutions, like the Office of the Ombudsman, whose parliamentary appointment renders them superior to the government in the democratic organigramme, the government seems to have adopted one standard reply: no criticism please, we`re the government!
Tuesday, 10 September 2002
Friday, September 6, presented a clear example of how the two distinct factions (John Dalli against all the rest) forming the PN are reacting very differently to adverse circumstances.
While John Dalli kept his cool parrying criticism of financial misreporting by using his accounting technical abilities to justify the unjustifiable, the rest lost their heads reacting abusively to some hard criticism which the Ombudsman sent their way the Sunday before.
Maybe they are both reacting differently to the accumulating evidence of loss of support for the government and its policies. While John Dalli's aspirations for party leadership could well be served by a poor showing at the next electoral tests, the rest are panicking in the face of this adversity. `While John Dalli's aspirations for party leadership could well be served by a poor showing at the next electoral tests, the rest are panicking in the face of this adversity.`
Mr Dalli maintains that he had no option but to consider dividends and tax payments by MIA as ordinary revenue. This might impress the uninformed but cuts no real ice. Fact is that the government revenue can be classified in three different ways: ordinary revenue, extraordinary revenue and financing revenue.
MIA pure privatisation revenue amounted to Lm19 million and this has been correctly classified as financing revenue. But in so doing it should make Mr Dalli blush when he had repeatedly claimed that he was so clever that he sold 40 per cent of MIA for Lm40 million and now we know that really it was Lm19 million.
The other Lm21 million was classified as ordinary revenue. This is technically correct but substantially, it is heresy. At a time when accounting standards are moving in the direction where substance overrides technicalities, John Dalli prefers technicalities to override substance. This is understandable, as while technicalities can be manipulated, substance cannot.
The substance is that there is nothing ordinary about these Lm21 million. They are one-off revenue engineered through a structured deal to abuse the defects of government accounting systems. They should have been classified as extraordinary revenue (just as, for example, revenue released from the sinking funds is classified) without misrepresenting the true extent of the structural deficit. `Arrogance and panic have reached explosive limits as the government thinks it has a right to spread with impunity our tax money to accommodate its friends and their friends, while our deficit keeps spinning out of control.`
If it were possible to solve government deficit through such structured deals, then I can give many other suggestions how the whole deficit could be magically resolved through manipulations of technicalities.
But reality would still stay with all its problems. And reality is that the true structural deficit for the seven months to July has reached Lm93 million, up from Lm55 million two years ago. So much for solving the deficit! So much for being on the right track! Cool technical manipulation of figures is not a solution.
All the rest lost their cool. In reaction to very specific, reasoned and well supported criticism by the Ombudsman, the DOI press release, clearly coming from the top echelons of the government, reacted in a hysterical manner.
Without rebutting in any reasonable manner the Ombudsman's criticism, it was rich only in denigrating adjectives that are unacceptable when addressed to a parliamentary position such as that of the Ombudsman.
Adjectives like indiscreet, objectionable, harmful and insulting do nothing to reply to the justifiable criticism levelled at the government. And this irrational reaction is because the Ombudsman, as is well within his right and duty, criticised the very working of the top echelons of the government, i.e., the cabinet.
The Ombudsman is there to defend the individual citizen from abuse of power of the executive. The places which hold most of this power, the cabinet and the OPM, are clearly areas where the Ombudsman has every right to criticise when decisions are taken irrationally or in a discriminating manner.
And the direct award of Lm30,000 to the PM's personal assistant as damages for violence suffered is abusive. It goes against the government's own policy, the sum was fixed arbitrarily and not through the normal checks and balances procedures and was all wrapped up two days before a general election which gives the impression of grab and run.
Arrogance and panic have reached explosive limits as the government thinks it has a right to spread with impunity our tax money to accommodate its friends and their friends, while our deficit keeps spinning out of control.
Monday, 9 September 2002
Minister John Dalli kept his cool parrying criticism of financial misreporting, using his accounting technical abilities to justify the unjustifiable. This contrasts quite strongly with the panic exposed by the rest of the government regarding hard criticism which the Ombudsman sent their way.
May be they are both reacting differently to the accumulating evidence of loss of support for the government and its policies. Whilst John Dalli’s aspirations for party leadership could well be served by a poor showing at the next electoral tests, the rest are panicking in the face of this adversity.
John Dalli maintains that he had no option but to consider dividends and tax payments by MIA as ordinary revenue. This might impress the uninformed but cuts no real ice. Fact is that government revenue can be classified in three different ways: ordinary revenue, extraordinary revenue and financing revenue.
“But the scheme which Minister Dalli forced MIA into before its privatisation generated another Lm21 million which was classified as ordinary revenue. This is technically correct but substantially, it is heresy”
In no country which holds its Ministers accountable through active and effective democratic checks would a Minister make false statements knowingly and be allowed to carry on with impunity. Just a few weeks back in a live TV debate with me Minister Dalli had again lied knowingly when cornered on four counts – see my article Comic Tragedy published
But the scheme which Minister Dalli forced MIA into before its privatisation generated another Lm21 million which was classified as ordinary revenue. This is technically correct but substantially, it is heresy. At a time when accounting standards are moving in the direction where substance overrides technicalities, John Dalli prefers technicalities to override substance. This is understandable, as while technicalities can be manipulated, substance cannot.
“The substance is that there is nothing ordinary about these Lm21 million“
If it were possible to solve government deficit through such structured deals, then I can give many other suggestions how the whole deficit could be magically resolved through manipulations of technicalities. But reality would still stay with all its problems. And reality is that the true structural deficit for the seven months to July has reached Lm93 million up from Lm56 in 1998. So much for solving the deficit! So much for being on the right track! Cool technical manipulation of figures is not a solution.
“The Central Bank, if it truly cherishes its independence in conducting its monetary policy, should at the very least show its displeasure for such schemes“
Now the deception is set to grow even further. The Foundation for Tomorrow Schools has announced that it has concluded local bank financing for building public schools. This is social capital expenditure financed normally through the Consolidated Fund and impacting on the structural deficit. By hiving off this financing to a separate Foundation, this expenditure will avoid direct impact on the structural deficit but it is still a debt which will have to be made good by a future labour government.
The Central Bank, which in its conduct of monetary policy takes into account the size of the public sector deficit, cannot remain disinterested in these artificial schemes, especially as it is involving large scale bank finance by licensed banks. The Central Bank, if it truly cherishes its independence in conducting its monetary policy, should at the very least show its displeasure for such schemes, use moral suasion to deter licensed bank from complicity in covering up the true extent of the public deficit, and sharpen its monetary policy to counter-act government abuse of fiscal policy for electoral purposes.
This is the time for Monetary Authorities (i.e. the Central Bank) to show their true mettle or is their autonomy only for the theory of the statute book?