The Malta Independent
25th June 2004
Prime Minister Gonzi took over his new responsibilities at an awkward time. He follows the act of his predecessor who has been extraordinarily successful in his unique style of keeping the country`s financial and economic problems isolated in government and central administration, giving the electorate the false and unsustainable notion that people can be rich whilst their government can be poor and indebted right up to its ears.
Gonzi no longer has the option of continuing in his predecessor`s bad, though politically effective, habits. Firstly because piling up each year`s problems layer upon layer has reduced our remaining debt capacity, has drawn blood and energy out of the economy which is stalling without any real growth, and has rendered the country economically uncompetitive in a globalised world where those who do not succeed simply fail without a margin in between.
Secondly because Malta is now living a new reality as members of the EU.` We no longer have complete sovereignty over economic management. Really in an economically globalised and inter-dependent world we never had such complete sovereignty.` But EU membership rules on their own, together with the obligation to prepare for adoption of the Euro as our single currency, means that we can no longer persist in old habits of avoiding to address problems and simply finance them by writing a cheque from taxpayer`s money or by loading further public debt on an already overloaded debt structure.
The Gonzi show therefore has to be different from the Fenech Adami show. No longer can we have the evident detachment of the Fenech Adami days where the Finance Minister recites annually in the budget presentation the government`s supposed determination to control expenditure and deficits, only to find out with monotonous repetition that there was really no collective cabinet commitment to do so. This has forced the former Finance Minister to apply his energies to camouflage the deficits rather than to address them, which has done very little for the country`s real needs for growth and development through global competitiveness.
So different it has to be, `that Gonzi has courageously kept direct responsibility for the Finance Ministry irking in the process at least one aspirant for the post vacated by Minister Dalli who clearly realised that there are no political rewards left for whoever assumes direct responsibility for addressing what has irresponsibly been left unaddressed for so long. It is widely known that Minister Dalli demanded a change in his ministerial portfolio following his unsuccessful bid for Party leadership and Prime Minister-ship. ` Three months down the road however the Gonzi show has yet to start. With EU membership celebrations and European Parliamentary elections on schedule in the first three months there were clear practical limits to how much could be done or even started before these events were behind the administration.
Some could argue that Gonzi needed time to take stock of the situation. This is hardly the case however.` Gonzi has been Deputy to his predecessor and cabinet Minister for nearly six years. He shares collective responsibility for the state of things as left over by Fenech Adami. The choice to present himself as the new kid on the block free from guilt of inherited pressing problems that need to be addressed with unpleasant measures is not available for Gonzi.
Which means that the Gonzi show must now start without further hesitation. Once the old Fenech Adami way of doing (or really hiding) things is not available any more, once people have sent the new PM clear messages in the EP and local elections that they are discontented with they way the government is managing, or really not managing, the recovery process, then really the risk for Gonzi has shifted.` There is more risk in doing nothing than there is risk in attempting to engineer a real economic restructuring process, painful as this may be.
The risk with doing nothing is that the economy will continue to stall as the costs of EU membership are not compensated by growth generated through new investment. The risk with proceeding in earnest with the re-structuring programme is that four years may not be time long enough to go through the unavoidable re-structuring pain in order to approach the next election with an economy invigorated with re-acquired international competitiveness. A situation where the electorate is convinced that the restructuring pain is behind it and that it can look forward to sustainable growth under PM Gonzi who had the courage to do what his predecessor conveniently avoided.
There is not one day to lose for Gonzi to put his show really on the road. Mid-term electoral losses at local level are a small price to pay for doing what Malta desperately needs and for taking the only route to re-establish his credentials for another term in office come the 2008 general election.` Consultations and consensus building are desirable but not to the point of achieving economic sclerosis where we continue to talk about problems without implementing any real action programme based solutions.
It is time for Gonzi to show that he can lead.
25th June 2004
Prime Minister Gonzi took over his new responsibilities at an awkward time. He follows the act of his predecessor who has been extraordinarily successful in his unique style of keeping the country`s financial and economic problems isolated in government and central administration, giving the electorate the false and unsustainable notion that people can be rich whilst their government can be poor and indebted right up to its ears. Gonzi no longer has the option of continuing in his predecessor`s bad, though politically effective, habits. Firstly because piling up each year`s problems layer upon layer has reduced our remaining debt capacity, has drawn blood and energy out of the economy which is stalling without any real growth, and has rendered the country economically uncompetitive in a globalised world where those who do not succeed simply fail without a margin in between.
Secondly because Malta is now living a new reality as members of the EU.` We no longer have complete sovereignty over economic management. Really in an economically globalised and inter-dependent world we never had such complete sovereignty.` But EU membership rules on their own, together with the obligation to prepare for adoption of the Euro as our single currency, means that we can no longer persist in old habits of avoiding to address problems and simply finance them by writing a cheque from taxpayer`s money or by loading further public debt on an already overloaded debt structure.
The Gonzi show therefore has to be different from the Fenech Adami show. No longer can we have the evident detachment of the Fenech Adami days where the Finance Minister recites annually in the budget presentation the government`s supposed determination to control expenditure and deficits, only to find out with monotonous repetition that there was really no collective cabinet commitment to do so. This has forced the former Finance Minister to apply his energies to camouflage the deficits rather than to address them, which has done very little for the country`s real needs for growth and development through global competitiveness.
So different it has to be, `that Gonzi has courageously kept direct responsibility for the Finance Ministry irking in the process at least one aspirant for the post vacated by Minister Dalli who clearly realised that there are no political rewards left for whoever assumes direct responsibility for addressing what has irresponsibly been left unaddressed for so long. It is widely known that Minister Dalli demanded a change in his ministerial portfolio following his unsuccessful bid for Party leadership and Prime Minister-ship. ` Three months down the road however the Gonzi show has yet to start. With EU membership celebrations and European Parliamentary elections on schedule in the first three months there were clear practical limits to how much could be done or even started before these events were behind the administration.
Some could argue that Gonzi needed time to take stock of the situation. This is hardly the case however.` Gonzi has been Deputy to his predecessor and cabinet Minister for nearly six years. He shares collective responsibility for the state of things as left over by Fenech Adami. The choice to present himself as the new kid on the block free from guilt of inherited pressing problems that need to be addressed with unpleasant measures is not available for Gonzi.
Which means that the Gonzi show must now start without further hesitation. Once the old Fenech Adami way of doing (or really hiding) things is not available any more, once people have sent the new PM clear messages in the EP and local elections that they are discontented with they way the government is managing, or really not managing, the recovery process, then really the risk for Gonzi has shifted.` There is more risk in doing nothing than there is risk in attempting to engineer a real economic restructuring process, painful as this may be.
The risk with doing nothing is that the economy will continue to stall as the costs of EU membership are not compensated by growth generated through new investment. The risk with proceeding in earnest with the re-structuring programme is that four years may not be time long enough to go through the unavoidable re-structuring pain in order to approach the next election with an economy invigorated with re-acquired international competitiveness. A situation where the electorate is convinced that the restructuring pain is behind it and that it can look forward to sustainable growth under PM Gonzi who had the courage to do what his predecessor conveniently avoided.
There is not one day to lose for Gonzi to put his show really on the road. Mid-term electoral losses at local level are a small price to pay for doing what Malta desperately needs and for taking the only route to re-establish his credentials for another term in office come the 2008 general election.` Consultations and consensus building are desirable but not to the point of achieving economic sclerosis where we continue to talk about problems without implementing any real action programme based solutions.
It is time for Gonzi to show that he can lead.
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