[ANALYSIS] House of Muscat: After Joseph, will Labour lose its gel?

Joseph Muscat’s government will go down in local history as the first to self-combust, not for political reasons, but for judicial ones.

The only silver lining is that his descent from the glory of winning elections with unprecedented electoral margins, to a sudden and deservedly inglorious exit tainted by Daphne Caruana Galizia’s assassination, has now exposed the intersections between politics, big business and organised crime.

The political question now is: does his fall from grace spell the end of the movement assembled by Muscat which included segments of big business, floating voters aspiring for a better country, switchers seeking personal gain, campaigners for civil liberties, and Labour’s ever loyal but always taken-for-granted working-class core? The coalition was robust enough to survive the Panama Papers scandal and the institutional paralysis which followed it. Will it outlive Muscat?

Much depends on the positioning of the new Labour leader, even if the chalice offered to him may be too poisoned for him or her to be in a position to hold it all together.

But Muscat’s implosion and the reverberations from the investigation, already dealt a fatal blow to Muscat’s failed political project. Moreover, the very dynamics of this coalition may well have speeded up Muscat’s fall from grace and the country’s descent to hubris.

Former Chief of Staff, Keith Schembri

Keith Schembri at the heart of the state

Take Keith Schembri. He is credited as the chief architect of Muscat’s electoral success. Muscat had appointed him to the most important position of trust despite being a successful businessman with many fingers in the pie. In that role he served as an important peg between government and big business interests in a period characterised by economic growth, but also controversial land and asset grabs.

His buddy Yorgen Fenech, the scion of the powerful Tumas Group, now stands accused of the assassination of Daphne Caruana Galizia and has now turned against Schembri. Yet Fenech, whose secret company 17 Black was tied to Schembri’s Panama company, was also pivotal for Labour’s energy policies, having formed part of the Electrogas consortium.

Still Schembri’s contribution to Muscat was deemed so valuable that the PM repeatedly closed an eye on his offshore business even after November 2018, when Yorgen Fenech was outed as the owner of 17 Black and Muscat was aware of his possible involvement in the assassination, after being informed by the Security Service in meetings where Schembri himself was present.

With Schembri out of the picture Labour may have lost an important ally in a traditionally hostile sector. It did so by widening the circle of beneficiaries, including many who felt excluded under previous administrations. But even before the latest events, the task of keeping everyone happy on board Muscat’s gravy train was becoming complicated as a bolder civil society started to fight back.

Businessman Yorgen Fenech

Big business and politics

The new Labour leader faces a quandary: that of changing the modus operandi of an economy on steroids, without inflicting shock treatment which may result in devastating withdrawal symptoms.

Business does not thrive in instability and Labour is now under pressure from business organisations to provide closure. For as a party in government, Labour will still have to establish a new relationship with local business leaders and foreign investors, retaining a dialogue without over-familiarity, shady deals, and putting some brakes on unsustainable development.

The relationship between government and construction moguls will be a major test for any Labour leader, as it has created the first cracks pitting residents, including floaters and even traditional Labourites, against Labour’s new allies in business.

One also has to see how a change in leadership will impact on the shady deals with foreign interests, including the Jordanian Sadeen group, whose ‘university’ plans in Cottonera and Zonqor have alienated local communities, and Henley & Partners, whose citizenship scheme adds to the reputational damage even if its monies continue to fill the coffers.

Moreover, any Labour leader will have to contend with the fall-out from increased scrutiny of Malta’s role in the global financial economy which pre-dates Labour and which generates the revenue which enabled Maltese governments to ditch austerity.

Next leader...

The ghosts of Labour past

While so far Muscat has not lost the adulation of a large segment of Labour voters constantly kept in line by a strong media machine and the allure of his narrative of progress, his sudden fall from grace may have shattered one of his greatest accomplishments: that of exorcising the fear that Labour in government is harmful to the country’s stability and serenity.

The sudden collapse of his ‘house of cards’ and the circumstances behind it, has inevitably rekindled memories of Labour’s more tragic moments, which obscure the great social reforms enacted under Labour administrations.  

Moreover, his refusal to bow down and resign immediately has worsened the situation. For by doing so he has brought the country to the brink of civil unrest. This has brought back memories of the confrontational style of politics in the 1980s and the Labour celebrations marking the ‘victory’ of its partnership model after the EU referendum. Such memories may well cloud the judgement of a whole generation of activists and intellectuals.

Many may still be in denial, but Labour has surely lost its influence among a sizeable number of people who would normally support a progressive, left-leaning government. Their vilification only serves to reinforce resentment and pave the way for a radicalisation which may have unforeseen consequences.

It also remains to be seen how Labour’s crop of ex-Nationalists will fare under a new leader: some like propagandist Karl Stagno Navarra and policy advisor Robert Musumeci have firmly supported Muscat right up to the end, but others like Cyrus Engerer who may be more in tune with floaters, have respectfully asked him to step aside.

Any new Labour leader may be under pressure to close ranks as militants become more wary of blow-back from suspicious types imported from the other side.

Yet such an attitude would backfire on Labour. For while Muscat’s major error was to open up to everyone, irrespective of their integrity and financial interests, a party needs to reach out to voters from the other side to flourish. The resurgence of tribalism may prove useful in ensuring Muscat a “dignified exit” among supporters but its long-term consequences may be terrible.

Moviment Graffitti at the national protest on Sunday

Labour and civil society

Labour must also contend with a sizeable segment of non-partisans demanding justice for Caruana Galizia and for constitutional reforms. Ruling these off because of antipathy towards the assassinated journalist would backfire on Labour.

A symbolic gesture like naming an official building or street for the assassinated journalist would go some way to compensate for the ridiculous clearance of flowers from the shrine dedicated to her, opposite the law courts.

The only way for a future Labour leader to restore his credentials among this influential sector, which includes many who support the party’s civil liberties agenda, would be to ensure a swift and satisfactory solution of the Caruana Galizia case accompanied by a wider probe on the Panama scandal, the institutional paralysis which followed it, and other major scandals like that involving the sale of public hospitals to a shell company.

In such a context the appointment of a new Attorney General and Police Commissioner is a sine quo non.

In short people now deserve an answer to the big question: why did Muscat not remove Keith Schembri and Konrad Mizzi when they were exposed in the Panama papers?

The cherry on the cake would be a strong drive for reforms aimed at setting a firewall against undue influence by big business as well as changes to the constitution to introduce more checks and balance.

This may well be Labour’s only way of reclaiming trust. It could also provide him with a compelling narrative to navigate country and party towards a brighter and cleaner future.

A collective bout of Stockholm syndrome?

Yet the greatest risk facing Labour is that its supporters are gripped by a Stockholm syndrome, strengthening the hand of a restoration, just as has happened Italy with the rise of Berlusconi – probably the most corrupt politician in contemporary Italian history – from the ashes of the defunct socialist and Christian Democratic parties.

In Malta the scenario of an outsider winning power to guarantee stability for the dominant classes is unlikely. But it is also possible that both parties can be taken over by elements which have the interests of the status quo at heart. The ease with which Labour was hijacked by a cabal stands as a reminder on how easily any promise of change can be betrayed and how complacent the masses can be to dirt and even assassination.

The strength of tribal loyalties may explain Muscat’s 42-day delay in keeping power and his rush to get a new leader elected during the festive season, depriving his party of a period of reflection and soul-searching before deciding on who should lead it.

For this is what happens when fast change at the top, triggered by judicial developments, happens in the absence of a robust, bottom-up moral awakening which cuts across partisan lines.

Yet such a path is the most dangerous, as it would mean that democracy as we know it is no more. The key to change remains an awakening within the Labour Party. So far the signs coming out from the party have been mixed, weak and too apologetic for Muscat.

This may not augur well for the task at hand.