Is this the big picture?

A year and three months of Lawrence Gonzi as Prime Minister, I have to admit I am still searching for examples of his “new way of doing politics.”
In his own opinion, one striking example of this promise is the fact that both government and the opposition agree they should ratify the EU Constitutional Treaty, just when the rest of Europe has put it in the freezer.
“For the first time in our history since our independence we are going to have agreement between government and opposition on one of the most important decisions for our country,” Gonzi says, adding that this treaty will have a “tremendous impact on Malta”.
“To reach unanimity is a great breakthrough in Maltese politics,” he says. “If we wanted to we could have taken a different position, we could have insisted six or eight months ago that our position was clear and was confirmed with the 2003 referendum and general election, but we chose the road of moderation to reach a position of consensus. That’s a new way of doing away with partisan politics for the national interest.”
Still, postponing ratification by eight months to wait for Labour to make up its mind, only to end up ratifying it in the midst of a European crisis, makes one wonder what relevance this will have for Malta. But Gonzi becomes agitated when told this. Folding his arms, he tells me he takes this as an insult.
“If the 10 member states who have already said ‘yes’ gave a message, and the two countries that voted ‘no’ gave a message, why shouldn’t Malta also be giving a message by saying either ‘yes’ or ‘no’? I don’t accept this inferiority complex. It’s a contradiction of the reality. Malta has every right to express itself and I don’t accept that just because the French and the Dutch said ‘no’ we should remain silent. I don’t accept that. It goes against the dignity of the Maltese. It’s the greatest insult I can receive.”
So why not let the people speak up about this constitution? It is after all a constitution of the citizens, not of the parties.
“Because we held a referendum two years ago.”
That was about membership, not the constitution.
“No we held a referendum two years ago about issues which I hope nobody forgot, it’s a short period of time. We discussed everything. Some said that if we joined we would be sending soldiers on conscription, others said we wouldn’t have our own commissioner, some said we would have only four or three MEPs, that we wouldn’t have a voice… these are all arguments we have been through and were related not only to membership but also as an integral part of the constitutional treaty, which replies precisely to all the points raised in the referendum campaign. So we’ve addressed all of them. This argument cannot be made for all of the member states. We had the most intense referendum campaigns here. The reality is that we have both parties who represent the people and who are taking a common position on this treaty.”
I tell him being for membership does not mean being in favour of this constitution, but the argument seems to go round in circles.
“The reply is that our people have already declared themselves categorically in an election that was held just a few months ago. Why do we have to go through the same arguments again? There’s no sense in going through that debate again. Why?”
With probably too much on his plate overseeing the technicalities of the country’s management in all their intricacies, I tell him some believe he gets bogged down in detail. Where is the big picture, Mr Prime Minister?
“The big picture is to see this country making a leap of quality across all sectors, in the context of our EU membership,” Gonzi says. “We have to arrange things where they need to be arranged. The target finally is not only to get the maximum out of the EU but to have an improvement in our people’s quality of life. To reach there we have to undergo this restructuring process we are going through and which is giving us results. When people say I’m bogged down in detail I think they’re incorrect. What I do is I coordinate, as prime minister, all the other ministers, who at the end remain responsible for their different sectors, but both as prime minister and finance minister I have to make sure that all the initiatives we’re taking, and we’re taking hundreds of them, will lead us to the big picture, that is the leap of quality.”
But when one sees him negotiating with Skanska for the Mater Dei Hospital building fees (Health Minister Deguara was left out of the process), or getting directly involved in tourism initiatives, one is led to believe that his ministers are ineffectual.
“No, absolutely. If you have every minister working on his own without the prime minister’s overall oversight, that’s a wrong method. I’ve never worked like that, it’s not something new for me. My method is to create the big picture by having a good feel of what’s going on, on the ground. If I get involved in tourism it doesn’t mean I’m taking over the job of the tourism minister, far from it. What I believe is that to make progress in tourism I need to make progress on the environment, in education, in the country’s infrastructure. I think every prime minister does that except that I’m going into certain details to know that we are really moving together towards our objectives.”
A couple of hours after the interview he announced in a press conference the two government plans to open a golf course in Ghajn Tuffieha and to build artificial islands – the former stirring environmental groups to protest against the destruction of an ecologically sensitive area and the latter still very much in the air, with feasibility studies still having to be drawn up. But with no intention of telling me anything before his joint press conference with Environment Minister George Pullicino and Tourism Minister Francis Zammit Dimech, he just informs me that “there are some very new interesting projects” to be announced. “Mind you only they are only two of many we are embarking upon.”
One of these ‘projects’ is the Lm9 million spree on Dar Malta, with works lagging behind as the government waits for the Belgian authorities’ permits to carry out structural changes at the heart of Brussels.
“Some works have been carried out,” he says defensively when I tell him that things there are at a standstill. “But we need permits to carry out other works, so we’re waiting for them.”
Is there any target date to open this embassy at all?
“Yes, we hope that by the end of 2006 all the works would have been completed.”
To the questions of whether there is an imminent reshuffle, he gives the typical noncommittal reply.
“That’s a decision I take in the circumstances.”
Is John Dalli eligible for a new Gonzi cabinet?
“Even that is a decision that is tied on whether I decide to make changes to my cabinet. Changes are not carried out because journalists ask questions, only if we really believe that they would be beneficial for the country.”
He adds that “to contribute to the country you don’t necessarily have to be a minister or a parliamentary secretary”.
Contributing to your country may come in the form of a government appointment, but looking at various Nationalist administrations, one finds a series of heavy-handed treatment of all those who fell out with the government. From Ombudsman Joe Sammut to Broadcasting Authority Chairman Joseph Said Pullicino, from Auditor General Joe Galea to Chief Electoral Commissioner Carmel Degabriele.
But Gonzi doesn’t like being branded intolerant.
“The fact that one is chosen to occupy a position does not mean that he is immune from criticism in the case he or she takes decisions on which there is disagreement. God forbid that happens, because that would mean censoring the government. God forbid that we reach a stage where government cannot even reply when it feels there was unfair criticism. This does not in any way reduce the validity of the people chosen. If someone is suggesting that government should just censor itself, I don’t accept that. We have every right to criticise and to answer.”
Well, that’s what Louis Galea promised to do four months ago when the Auditor General issued a damning report about the Foundations for Tomorrow’s Schools, saying he would tear the auditor’s report “to bits” in a report he was writing in reply. So far this report has not materialised.
“No Louis Galea issued statements and also gave details and explanations wherever he was disagreeing with the auditor general, the explanations are public, he also made declarations in parliament in this sense. They’re public knowledge and everyone can reach his conclusions.”
But the report he promised was never published, though the prime minister keeps insisting that the minister has published his replies. Therefore case closed.
On the other hand, Said Pullicino’s term has been extended for six months – a much shorter term than the usual three years. Why six months?
“Because nobody is here forever. Nobody is on cens perpetwu (permanent emphytuesis). What are we saying here? His term has expired, we’ve extended it by six months, and it seems to me that the time has come to make some changes.”
Including the chairman?
“Including the chairman. This removes nothing of the validity of the people on the authority. But it doesn’t mean that just because we appoint someone we are obliged to reappoint him, I hope nobody is suggesting so.”
What about changing the composition of the board, as suggested by Said Pullicino himself, to include civil society and not just leave the authority the monopoly of the two parties in parliament.
“Ideally we get to doing that, at least I hope we reach agreement on the idea. But it’s not easy; it’s difficult to take this approach that is radically different from what you had on the authority so far. It’s a wish I have, to do these radical changes.”
Radical only for the parties, because, at the end of the day, they have to agree on them. Gonzi nods.
About electoral reform, Gonzi says: “We’re at a point where there are several common ideas but there are also some fundamental decisions that the two parties have to take, actually the three, including Alternattiva. I think the situation will develop soon.”
Will we have a development by the end of this year?
“I hope so. By development I hope it will be positive but we can also disagree. I hope we reach an agreement.”
The PN itself backed out of the discussions in the first place.
“No it wasn’t the PN who backed out. The discussions were being carried out confidentially but all of a sudden confidentiality was blown with the wind. It doesn’t mean that because of that the process has stopped completely, absolutely.”
The latest fallout with the Nationalist establishment came from the helm of Sea Malta in the form of a dramatic resignation by chairman Marlene Mizzi. When she submitted her resignation less than a month ago, Gonzi refused it, implying that he had trust in her. Why is he now insinuating that the opposition was “well briefed” as if she was in cahoots with the Labour Party?
“I had met Marlene Mizzi and as far as I know our agreement was to wait until the company’s next annual general meeting. Sea Malta’s annual general meeting was not held last year, it was scheduled to be held this July and the agreement was that that would be the day when one considers resigning. I also told her that if she had to resign at that moment her resignation could have been misinterpreted. Even though we had agreed to wait until the general meeting all of a sudden I found this letter addressed to me and sent to the media at the same time. That meant that she changed effectively the agreement we had and she decided to make things public the way she did. I respect her decision.”
So you’re now considering her as being one with the opposition?
“I’m not saying she’s one with the opposition; what she wrote in her letter and what the opposition is saying are coincidences. A lot of coincidences happen, but this is not just about the content. But it is also a striking coincidence that it had to happen just at this critical moment of negotiations in a bid to save Sea Malta. This has become a pattern in this country, a constant pattern. Whenever the government is negotiating in the national interest, the opposition puts spokes in the wheels. This is yet another case. I refer to Chambray, the helicopter service, the Mater Dei. It’s a consistent pattern, and it’s scandalous.
“I’m referring to the opposition. With regards to Marlene Mizzi I’m not making the same reference. I’m just saying that we had an agreement. I didn’t breach that agreement. She did.”
Speaking of agreements, why was the Lm2 million capital injection committed to Sea Malta in 2002 never invested? Those funds were promised to former chairman Marlene Mizzi by then finance minister John Dalli.
“First of all it does not result to me that there was any promise to inject Lm2 million. The government does not invest money just because it promises them.”
John Dalli had committed those funds in writing.
“Hold on a second, because now we’re disagreeing not just on how to lead a country but also on how to manage a company. Do you manage a company by promising Lm2 million? Is that how we want things to be done? A company works with a business plan, with set targets, with a decent management that guarantees that your investment will deliver a future for the company. These are our people’s money, so we have to invest them where it makes business sense. The analysis we had was that, for several reasons, such as extra staff, much higher wages than those working for other Mediterranean shipping lines… the situation was such that Sea Malta could never become viable and stop making losses. So the decision that was taken was that the only way forward would be an investment in the company accompanied by restructuring.
“Now if anyone tells me it has to be the government to invest, my reply is, with all due respect, this is a socialist ideology which I hope has been thrown away once and for all from this country. Private investors can be made to also work in the national interest through detailed public service obligation contracts. My logic, our logic as government is that those government entities that were draining millions of liri of taxpayers’ money, have to cease operating with subsidies so that we could invest those money on other things. We shouldn’t keep subsidising the fear of change. Whoever insists that we should keep subsidising all these companies because of fear of change, that is not how we work. Wherever our experts and technicians say such a formula is a viable one for our country we will go down that route.”
As we speak, the figures coming out of the National Statistics Office give a bleak picture of the economy. In the last five months, government’s deficit increased by Lm8 million when compared to the same period last year, while revenue from income tax went down by Lm2.5 million and from National Insurance contributions by Lm2.3 million.
“And revenue went up on VAT,” he interjects.
Right, by Lm3 million, but losing revenue on NI and income tax must be very worrying.
“First of all whenever I gave my press briefings I also explained the financial situation. Every time I said that we’ve started this year with expenses that we didn’t have last year, particularly this year we have an extra social security payment of Lm8 million, that were already budgeted. There are other factors. In January last year we did not have to fork out contributions to the EU, as from this year we do. From the budgets we’ve established for ourselves, month by month, it seems that generally we’re sticking to our budgets. While we’re making more revenues than expected from VAT – which is very interesting because it is a tax on consumption, proving wrong all those who are saying people are not spending money on anything as if we were in a crisis – when it comes to income tax, yes we’re not getting as much payments as we had budgeted. There are particular reasons for that. If government is pushing taxpayers to pay their arrears, fees and fines, business usually postpones payments on certain items to settle others. It’s something we’re following closely.
“As regards social security, even there we have a larger expenditure than last year’s although it’s very close to what we had budgeted. What is interesting is that unemployment is going down at a very steady rate. Today we have around 1,000 less unemployed registering on part 1 than in the first week of January, at a time when we had to absorb all those who ended jobless because of restructuring. If you just look at the figures you realise that in the last 10 years there was an improvement in employment the first six months only twice, in 1995 and in 2000.”
According to the Governor of the Central Bank, Michael Bonello, rising inflation in May contrasted with the declining trend of inflation among Malta’s main trading partners, which is inconsistent with the sluggish economic activity, pointing to rigid prices of goods and services. Isn’t he concerned about high inflation?
“Oil is one of the reasons (for high inflation), but the fact remains that there are other products with high prices which should have gone down,” Gonzi says. “We are worried by the rising inflation rate and we’re looking at it.”
What are you going to do about it?
“We have to see that the country’s structures set up to regulate and oversee fair competition ensure there is such a competition and not cartels which keep up their prices artificially. So we have to ensure that the right controls are in place, because competition should be giving us lower prices.”
So does he have any indication that there is unfair competition?
“I have an indication that prices should be going down but they aren’t,” the prime minister says. “We have to discover the reasons why. I’m not saying there is definitely a cartel but when you don’t find a direct reason is when you start realising there is something wrong, because competition should be lowering prices.”
To the question of how he intends increasing economic growth, Gonzi points at the cost-cutting attempts by government which will have a negative effect on growth figures.
“The exercise of making government smaller and control its expenditure is giving good results. Naturally the effect of that is that it affects growth figures negatively, but all this is necessary.”
I tell him nobody expects him to raise growth by increasing government expenditure.
“Of course, the real challenge is to generate real growth while cutting public expenditure. That would be our real leap forward in the economy. We should also look at exports, where after a period of decline we have indications that exports are going to increase. We shouldn’t rush to conclusions about economic growth; we can’t base our analysis on just a quarter but on a long term, because our economy is very seasonal. So I prefer to make my analysis about economic growth after I have the results of another quarter.”
With the next Euro appointment set at January 2008, I ask him whether he is ready to make Malta join the Eurozone in election year.
“Let’s take it one step at a time. The commitment we took so far is to join ERM II, and we did. The second commitment is the convergence plan and we have to meet its criteria. We’ve met all the targets set for 2004, and we’re doing our utmost to meet this year’s targets. Then we will be able to reach our conclusions, to decide when to introduce the Euro. At this moment we can only hypothesise, and we won’t be acting on hypotheses on this issue.”
With the Euro not really capturing the imagination of anyone at present, particularly in view of some other countries’ disastrous experience, I ask him what he thinks he will be remembered for after Fenech Adami’s European vision.
“I can give you a long list of things… I can give you a long list of things related to reforms, restructuring, fiscal consolidation, education, environment … a lot of things I’m proud of, which are ultimately about improving our quality of life.”
Our quality of life seems to be his project, although how much it will capture popular imagination still remains to be seen.
“The reason why I entered politics is that through politics I improve the quality of the people’s life. Even when we were joining the EU, that was not the real target, but improving our quality of life. That’s the aim of politics.”