[ANALYSIS] How Muscat has worked his way back into the European mainstream

Maltese voters are unlikely to vote along European lines. But international alignments may have a bearing on the ability of Maltese politicians to influence counterparts on issues like taxation and immigration as well as in enhancing their standing abroad.

In co-signing an appeal against the rise of the far-right and in defence of European values, along leading European centrist and liberal politicians, Muscat has sent a strong message that he is still respected in European circles despite the increased focus on Malta’s opaque financial system and increased scrutiny on its institutions in the aftermath of the murder of journalist Daphne Caruana Galizia.

The op-ed appeared in the Times, Guardian, El País and Libération and saw the Maltese Prime Minister Joseph Muscat signing a common appeal along ALDE chief Guy Verhofstadt, Christophe Castaner, the leader of Emmanuel Macron’s La République En Marche movement, former Italian PM Matteo Renzi, Spain’s Ciudadanos leader Albert Rivera, former Romanian PM Dacian Ciolo, Belgium’s MR politician Olivier Chastel and Dutch Democrats 66 leader Alexander Pechtold.

The message is that despite taking flak, Muscat is still be seen as a reliable interlocutor in the European political mainstream. Muscat’s international posturing has put him back on the map of movers and shakers, and possibly on the waiting list for an official EU appointment. By putting his name on a manifesto before other more reluctant centre-left leaders, he may be maximising any future dividend from his investment even if his hopes may hit a snag if the Macron project of a European version of En Marche fails to take off.

While Macron may wish to turn next year’s election into a simple choice between the far right and the political centre, such a dichotomy ignores those who reject xenophobia but also question neo-liberal policies

This will not extinguish international scrutiny, which will probably resurface on the one year anniversary of Caruana Galizia’s death. The heavy-handed way in which the makeshift shrine in front of the law courts was cleaned up reflects a certain nervousness in the run-up to this anniversary, which in itself raises question on how deep is Muscat’s commitment to so-called European values. Curiously, unlike many others in his party who react with myopic nationalism at any criticism made from outsiders, the letter which Muscat co-signed clearly affirms “the committed adherence to the rule of law and democratic institutions” in the face “of appeals to muzzle justice and opposition”, in countries like Italy and Hungary. Only last May Verhofstadt, one of the authors of the op-ed signed by Muscat, had decreed Malta’s “corrupt political system” as “not European”.

Still the need for international legitimacy may also condition Muscat’s approach  to local politics in a more liberal direction.

Muscat has already changed his party’s approach to immigration from a hawkish one to one based on diplomacy and collective responsibilities. While this reflects changed economic realities, this approach has given Muscat the opportunity to work closely with other European leaders and thus gain their personal trust.

Muscat’s way of resolving contradictions between European expectations and the sentiments of some of his traditional voters may well be through balancing acts, like that of impounding NGO vessels in the harbour to appease immigration hawks. Yet in this he is also in line with fellow centrist leaders who posture themselves as the enemies of the far-right while proposing their own version of fortress Europe.

A farewell to socialism?

As the only current socialist leader to sign the declaration, Muscat may have taken a risk of breaking ranks with historical allies in the name of an alliance which includes competitors of other socialist parties like the centre-right Ciudadanos in Spain.

In many ways Muscat’s international choices seem to reflect his transformation of  the Maltese Labour Party into a pro-business alliance of “moderates and progressives.” Moreover, it is unclear whether the alliance will develop as a more liberal alternative to the EPP or as a broad progressive alliance united by core European values, one which may include a diversity of politicians ranging from French President Macron to left-wing Greek Prime Minister Alexis Tsipras.

Muscat’s international gamble comes with risks. For to do this he is hobnobbing with ‘europeanists’ who may favour increased tax harmonisation which could harm Malta’s competitive advantages in the sector. The letter suggested that Joseph Muscat could back the demands of bigger players in the field of digital taxation: “We are just at the beginning of the process – but we know the only possible solution is a European one,” a hint at a harmonised tax.

Muscat’s sovereignist paradox

Muscat who was once adamantly against EU membership which was perceived as a threat to Maltese sovereignty by his party has now co-signed an appeal which calls for more Europe.

“Instead of a divided and weakened Europe which is at the mercy of world powers, we want a sovereign Europe that acts robustly at all times where the action of isolated countries is unyielding – especially when it comes to economic and monetary policy, security and defence, social policy, ecological and agricultural transition, immigration and integration, plus digital change”.

Muscat is also defying the Labour Party’s “sovereignist” tradition which remains alive and kicking even in Muscat’s defiance to the European commission in matters like the Individual Investor
Programme.

In fact, the main difference between Muscat and the Italian populists may well be that while the latter are defying deficit rules, Muscat has created a new source of revenue by selling European citizenship.

Significantly he has coupled this revenue with an open market in foreign labour and property, which increased Malta’s tax revenue. This may well be another case where the outrage and zeal found among MEPs contrasts with the complacency of the EU commission and European council. In the end Muscat not only failed to scrap the IIP but has declared his intention to expand it.

The federalist quandary

Muscat’s hobnobbing with Europeanists who may question Malta’s taxation regime must be seen in the context that the Labour Party is already isolated among the European socialists.

In fact, Muscat may wield more influence among more like-minded pro-business politicians than within his party’s traditional political family. With Britain leaving the EU, Muscat may prefer to have influence among like-minded politicians than being isolated.

Moreover, unlike the federalism advocated by liberal leader Verhofstadt who also signed the article, the kind of Europeanism pushed by Macron is one which gives more power to the European council (composed of head of governments) and not the commission and parliament.   

Moreover, Muscat has more in common with liberal centrist parties than with the socialists, some of which have to contend with forces on their left.

Thus while some may follow Muscat into Macron’s embrace, others may be more interested in teaming up with forces to their left.

Socialist governments backed by forces to their left, like the left block and Podemos, already lead Spain and Portugal. Muscat who was quick to tweet his support for Manuel Valls who is trying to unseat Barcelona’s left-wing mayor Ada Colau betrayed his preference for bland European centrism over radical democratic experiments. While Macron may wish to turn next year’s election into a simple choice between the far right and the political centre, such a dichotomy ignores those who reject xenophobia but also question neo-liberal policies.

It remains doubtful whether a centrist alliance will help in stopping the march of the far right.   

In fact, Salvini seems relishing the prospect of a European-wide contest, which pits populists against the French President who is perceived to represent the establishment.

In many ways Macron may well be perceived as the European equivalent of a Hilary Clinton. Salvini may well be in greater trouble facing the European equivalent of a Bernie Sanders.

Salvini is likely to get a boost from any attempt by the commission to reign in his government’s budget. For how can the commission reprimand Italy for a 2.6 per cent deficit when France announced a higher-than-expected deficit of 2.8 percent?

While Muscat may be insuring his political future by gambling on a wider alliance in the knowledge that while his party is a sure winner, locally the European Socialists are heading to defeat, the Nationalist  Party will still end forming part of the largest parliamentary group; the European People’s Party.   

Yet this party will be increasingly divided between liberal centrists who may be closer to Macron and more right-wing conservatives who are closer to Salvini. In this sense by emphasising immigration as an issue, Adrian Delia may be following a European trend. One major incognita remains whether a far-right outfit may grab votes from both PN and PL.