20 September 2006

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Business Today

Gonzi, statistics and the countdown

When Lawrence Gonzi steps onto the podium at the Granaries tonight to address the party faithful he may not have elections on his mind but what he says and the events that will unfold next year could have a bearing on when hard-nosed electioneering starts. James Debono writes.

Addressing the party’s faithful on the granaries tonight, Lawrence Gonzi must galvanise his troops for what could be one of the longest and most uncertain electoral campaigns in recent Maltese history.
Irrespective of whether the Prime Minister opts for a snap general election sometime next year or to keep hanging on to power until it’s definitely game over in August 2008, the countdown for the next general election is ticking louder.
Most probably not even the Prime Minister knows exactly when he intends to take Malta to the polls as this could depend on events, which will enfold next year even if he has declared repeatedly that he intends serving his full term.
Despite the Prime Minister’s declarations, his party has been sending conflicting messages on the timing of the elections, with party secretary general Joe Saliba hinting at a March election in an interview with MaltaToday and the Prime Minister himself declaring that he intends serving his full term.
To add more speculation, the party’s Sunday paper il-Mument published the PN’s initial list of candidates. It contained very few novelties except for John Dalli’s candidature in the 10th district, which is turning into a veritable minefield for the PN.
Strategically the party could be hinting at an early election to get the opposition into an aggressive mode prematurely thus exposing it to charges of irresponsibility.
Whether he decides to hang on to power till the last moment or not, depends on what happens in the first half of 2007.
Events unfolding next year will give the Prime Minister the chance to prove his worth and thus face the electorate with some laurels on his head - something which has eluded Gonzi for the past four years.
Deprived of an over-riding issue and leading a party, which has occupied the seats of power for most of the last two decades, Gonzi desperately needs results to prove himself as a Prime Minister who delivers.
Only two years ago, speaking on the same occasion at the granaries, the Prime Minister spoke on the importance of taking a decision on a golf course. In the subsequent months he went on to propose rebuilding the old theatre, creating artificial islands, and most lately creating jobs at Smart City. Gonzi faces his last term in office still in search of his holy grail.
Still the Prime Minister needs to keep his troops ready for any opportunity, which could crop up next year.
One possible variable determining the election date is whether the EU commission will give a positive verdict on the adoption of the Euro in 2008. The verdict is expected to be issued in July but by March government will have enough indications to know whether it has reached this aim or not.
A positive verdict from the EU commission coupled with the opening of the Mater Die hospital on the Prime Minister birthday in July, will provide Gonzi with a perfect backdrop for an election some time in Autumn next year.
Yet all this depends on whether inflation is kept in check below the EU’s reference value - something which does not entirely depend on government. Even if the finance ministry is cautiously optimistic that inflation will eventually start dropping by February next year Malta still runs the risk of losing the chance to join the Euro in 2008 and the government will have nothing to show the country for all the sacrifices made to get the deficit in order.
If by December this year indications from the inflation front prove negative, Gonzi might consider a snap election before the Euro verdict is out some time between March and June, possibly 1 May, the third anniversary of EU membership.
Yet if he goes for this option, it might not suit the PN to face the prospect of a trouncing in a local election a few weeks before a general election. An MLP victory at local level could further reinforce the MLP’s confidence and demoralise the PN’s grass roots.
Since the writ for local elections is normally issued in January, Gonzi will have little time to make up his mind. To keep his options open he might postpone the local elections writ but that would be a clear indication of an early election. This would effectively mean that the election campaign will kick off in January.
Yet in order to go for this option the PM needs some concrete results before the campaign kicks off. Tax relief in the next budget could assuage middle class discontent.
The PN could also try to ride on the crest of the SmartCity project, which is expected to be approved in parliament in October. The party’s choice of slogan: Int @Smart_Malta could be indicative of this strategy. The PN could also attempt to lure Labour into criticising the project and thus accusing it of scaring away foreign investment.
Yet as more details of the project emerge in the media, showing how the investment primarily consists of real estate, the PN risks irking ‘smart’ voters who can distinguish between an exercise in property speculation and productive investment.
Still the Prime Minister could opt to hang on to power until July 2008. This would be an unlikely option if the government gets a positive verdict from the European Union to join Eurozone in January 2008. The government would then risk facing an election amidst spiralling inflation as businesses mark up their prices. And even if abuse is controlled, perceptive inflation can never be eliminated.
But if entry to the Euro is postponed to a later date, Gonzi might try to play for time and hinge his bets on a long electoral campaign starting in January 2008. If that is the case, most probably local elections and general elections will be held on the same date in 2008. Gonzi could either opt for a shorter campaign by holding the elections in March or for a long campaign lasting up to May 2008 with all the risks of slowing down the economy endangering Malta’s Euro bid for 2009.
By hanging on to power until the last day, Gonzi also risks paying the political cost of being compared to Karmenu Mifsud Bonnici, the last prime minister to hold on to the last day in office hoping for a last minute change in the electoral mood.
Tonight Gonzi faces one major problem. He cannot yet say mission accomplished. He can only quote economic statistics showing that he is getting there. Expect economic growth statistics, debt and deficit figures to be bandied about at will. For the moment they are all Gonzi has to show.
If by the next election, the party still has nothing more to offer than statistics, its only alternative would be to launch a massive scaremongering campaign against the Malta Labour Party, particularly its leader.
The PN can still argue that for the past two decades it has set the direction with the MLP grudgingly following its path. It could also convincingly argue that Alfred Sant has also been around for a very long time.
European experience shows that aggressive assaults on opponents can still do wonders to incumbent governments facing difficulties. It nearly worked for Italian media mogul Silvio Berlusconi and former German chancellor Gerhard Schroeder. Whether Gonzi has the stamina of these two politicians, to engineer a comeback is hard to tell. His will be a very long shot indeed.
Yet a massive dose of partisan virulence risks further alienating those voters who are smart enough to see through partisan propaganda.


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