At last!!

The Malta Independent

At last!

The nationalist party and the labour party have found some common ground. Last weekend the Prime Minister revealed for the first time that EU referendum may be held after elections.` This was a totally new revelation going against all previous pronouncements which consistently` indicated government`s determination to proceed to EU accession within the term of this legislature in 2003 following a referendum in 2002.

This change of position is in line with a weighty resolution approved by the MLP general conference held over the weekend which clearly underlined Labour`s policy regarding the EU. The resolution also affirmed that a decision by the electorate regarding future relations with the EU can only be sourced from a new electoral mandate and not from a referendum decision which could easily be neutralised in a subsequent general election result due within less than 12 months.

What has led to the Prime Minister`s sudden and substantial` shift in the Government`s position` One cannot be too sure about what goes on in the corridors of a person`s mind but I am positive` the following reasons were not too far from the Prime Minister`s mind when deciding to shift position. `Firstly it is clear that the electoral mood regarding EU membership is drifting away from membership. The more rhetoric propaganda is dished out to support the membership option the less convinced people grow about it and the more willing to consider other alternatives. The Opposition has forcibly won the argument that alternatives to membership do in fact` exist.` The revelation of a document of European Popular Parties recommending an alternative route to membership for certain countries that do not opt for membership, a document subscribed to by the Prime Minister himself, seals the argument in a definite manner.

Secondly the Prime Minister cannot ignore soundings from the EU itself that membership during the current legislature which runs out by November 1993 is becoming an increasingly unlikely scenario.` Realisation is sinking in that the` Nice Treaty makes a poor foundation for enlargement and that further changes are needed through a further IGC called for 2004 to negotiate further treaty changes to simplify the decision making process in an enlarged community.` The EU must be putting pressure on the Prime Minister to seek a fresh electoral mandate so that it can negotiate with the comfort of a full term electoral mandate rather than risk wasting years of negotiations which are then thrown down the drain by the electorate.` The EU must be discreetly warning the Prime Minister that a poor turnout in a referendum unsubscribed by the Opposition will not constitute a sufficient mandate to proceed with membership.

Thirdly there is the worsening economic scenario which makes a poor setting for achieving the result desired by the government in a referendum.

Which leaves open the question:` Now that there is common ground that a referendum has to be preceded by a general election does this mean that we could face early elections or that the whole EU project is to be` postponed by a couple of years Your guess is as good as mine. The EU would prefer early elections so that it can negotiate with a government enjoying a clear mandate for its EU relations and with a term long enough to bring the project to its conclusion.` The economic scenario on the other hand argues against government acceding to EU pressures.

The Prime Minister has clear choices to make. The national interest demands an early election but personal and party interest could demand otherwise. This is not unlike the` position Alfred Sant found himself in summer 1998. Alfred Sant sacrificed himself and the party and history will acknowledge and reward him for it. So far history will judge the Fenech Adami as placing party consistently` before national interest.` To prove the point one need just look at the national debt mountain which artifically financed a feel good factor that` sustained government`s term in power. Will Fenech Adami clinch this one last chance to rise to the national occasion`

Arrogance for argument

The Malta Independent on Sunday

Arrogance for argument

When politicians run out of arguments to defend their position they tend to replace it with arrogance.` As this administration cruises with fatigue towards its mid-point it is showing abundance of arrogance and scarcity of argument.

These are the` characteristics of the first part of this :

q











EU accession process q











Increased impact of taxation through new measures and enforcement of existing ones. q











Privatisation programme and its effects on the capital markets q











Economic stagnation.

Under each and every aspect government`s position is supported by arrogance rather than argument.

EU Accession

The main thesis underpinning government`s policy for EU membership is not that it is the best solution but that it is the only solution.` So rather than explain the overall net merits of EU membership, such an important subject with consequences far beyond the limits of government`s electoral mandate, is sustained by denigrating the Opposition`s policy of special Swiss style contractual relationship with the EU.

Government`s sole argument for EU membership is TINA (There Is No Alternative).` What Switzerland, Norway and Iceland have chosen to be their model for their relationship with the EU is not even worth considering.` For the government, Switzerland, Norway and Iceland are much less European than Ireland and Sweden.

My request for MIC funding to Super One TV to present factual information about the choices made by Switzerland Norway and Iceland gets` refused for reason that it does not form part of the terms of reference which are strictly within the parameters of EU membership.

Arrogance dictates that Malta should be all for EU membership not because it is a smart choice but because it is a no choice. Other options are` conveniently brushed aside.` Old age wisdom, repeated in Dr Tabone`s biography, of keeping options open is unfashionable for those who see EU membership as a personable objective rather than a national choice.

Taxation

Taxation has certainly been the hallmark of the first half of this administration.` Taxation has a dual purpose. It is necessary to finance the functioning of government. It is also an important element of fiscal policy as one of the most effective macro-economic tools.

Government is using taxation merely as a funding exercise. The role of taxation as a macro-economic tool has been totally forgotten.`

A fiscal deficit of horrendous proportions architectured by those who denied its existence a mere 30 months ago is constraining our economic managers to slap ill-thought fiscal discipline on a fragile economy.

But rather than admit that their own past mistakes of the `money no problem` culture are rendering current hard measures unavoidable, arrogance stimulates government to sing praises to fiscal discipline without making any serious attempt to address the expenditure side of the budget equation.

Privatisation and Capital Markets

The only privatisation item handled so far was that of the fire-sale of Mid-Med Bank. This has been a model of how not to privatise.` It was widely criticised for the method chosen, for the price obtained and for the strategic implication of making Malta the only sovereign country where half of its banking industry is controlled by a single foreign institution.

This privatisation did however help to expose the true value of Maltese equities which were seriously undervalued on the Stock Exchange` due to the illiquidity of the capital markets.` `Rather than` rejoice for this indirect benefit, the capital market explosion increased government blushes as it helped to quantify in clear numeric terms the opportunity cost of the Mid-Med firesale.

As if for spite administrative measures ( sale of Middle Sea shares at much below market price)` and fiscal measures ( tax on collective investment schemes) are devised with the aim of puncturing the Stock Market values which were well on their way to an orderly price correction and needed no external help to achieve a crisis driven value destruction.

Hereagain rather than admit mistakes, mis-judgements and imprudent behaviour the administration continues to ferment its arrogance depicting itself above all criticism and labelling critics as stupid morons.

Economic Stagnation

Yet the chickens finally come home to roost though economic leads and lags may obscure the correlation between cause and effect. But enough economic indicators are emerging which point to clear economic stagnation. Sharp deterioration in the balance of payments, loss of foreign exchange reserves by the Central Bank, meltdown on the capital markets,` contraction of the tourism sector, uncertainty in the domestically oriented industry, lack of any significant direct foreign investment, all these indicators point to one direction.

Arrogance can never be a substitute for argument. Much less can it underpin the national effort across political frontiers which is needed to overcome the structural economic problems which nationalist administrations running this country for the last 168 months, bar 22, must take clear responsibility for.

Arrogance for argument

The Malta Independent on Sunday

Arrogance for argument

When politicians run out of arguments to defend their position they tend to replace it with arrogance.` As this administration cruises with fatigue towards its mid-point it is showing abundance of arrogance and scarcity of argument.

These are the` characteristics of the first part of this :

q











EU accession process q











Increased impact of taxation through new measures and enforcement of existing ones. q











Privatisation programme and its effects on the capital markets q











Economic stagnation.

Under each and every aspect government`s position is supported by arrogance rather than argument.

EU Accession

The main thesis underpinning government`s policy for EU membership is not that it is the best solution but that it is the only solution.` So rather than explain the overall net merits of EU membership, such an important subject with consequences far beyond the limits of government`s electoral mandate, is sustained by denigrating the Opposition`s policy of special Swiss style contractual relationship with the EU.

Government`s sole argument for EU membership is TINA (There Is No Alternative).` What Switzerland, Norway and Iceland have chosen to be their model for their relationship with the EU is not even worth considering.` For the government, Switzerland, Norway and Iceland are much less European than Ireland and Sweden.

My request for MIC funding to Super One TV to present factual information about the choices made by Switzerland Norway and Iceland gets` refused for reason that it does not form part of the terms of reference which are strictly within the parameters of EU membership.

Arrogance dictates that Malta should be all for EU membership not because it is a smart choice but because it is a no choice. Other options are` conveniently brushed aside.` Old age wisdom, repeated in Dr Tabone`s biography, of keeping options open is unfashionable for those who see EU membership as a personable objective rather than a national choice.

Taxation

Taxation has certainly been the hallmark of the first half of this administration.` Taxation has a dual purpose. It is necessary to finance the functioning of government. It is also an important element of fiscal policy as one of the most effective macro-economic tools.

Government is using taxation merely as a funding exercise. The role of taxation as a macro-economic tool has been totally forgotten.`

A fiscal deficit of horrendous proportions architectured by those who denied its existence a mere 30 months ago is constraining our economic managers to slap ill-thought fiscal discipline on a fragile economy.

But rather than admit that their own past mistakes of the `money no problem` culture are rendering current hard measures unavoidable, arrogance stimulates government to sing praises to fiscal discipline without making any serious attempt to address the expenditure side of the budget equation.

Privatisation and Capital Markets

The only privatisation item handled so far was that of the fire-sale of Mid-Med Bank. This has been a model of how not to privatise.` It was widely criticised for the method chosen, for the price obtained and for the strategic implication of making Malta the only sovereign country where half of its banking industry is controlled by a single foreign institution.

This privatisation did however help to expose the true value of Maltese equities which were seriously undervalued on the Stock Exchange` due to the illiquidity of the capital markets.` `Rather than` rejoice for this indirect benefit, the capital market explosion increased government blushes as it helped to quantify in clear numeric terms the opportunity cost of the Mid-Med firesale.

As if for spite administrative measures ( sale of Middle Sea shares at much below market price)` and fiscal measures ( tax on collective investment schemes) are devised with the aim of puncturing the Stock Market values which were well on their way to an orderly price correction and needed no external help to achieve a crisis driven value destruction.

Hereagain rather than admit mistakes, mis-judgements and imprudent behaviour the administration continues to ferment its arrogance depicting itself above all criticism and labelling critics as stupid morons.

Economic Stagnation

Yet the chickens finally come home to roost though economic leads and lags may obscure the correlation between cause and effect. But enough economic indicators are emerging which point to clear economic stagnation. Sharp deterioration in the balance of payments, loss of foreign exchange reserves by the Central Bank, meltdown on the capital markets,` contraction of the tourism sector, uncertainty in the domestically oriented industry, lack of any significant direct foreign investment, all these indicators point to one direction.

Arrogance can never be a substitute for argument. Much less can it underpin the national effort across political frontiers which is needed to overcome the structural economic problems which nationalist administrations running this country for the last 168 months, bar 22, must take clear responsibility for.