Bar Malta?

Posted in 1 by Editor on May 24, 2010

Martinelli? Never heard of him.

The news of Nick Clegg’s reference to Malta appears to have tickled just about everybody’s fancy on our (bitter) sweet isle. The Lib Dem leader and UK’s new Deputy Prime Minister spoke in the late morning of Tuesday, May 19 at the City and Islington College Centre for Business, Arts and Technology, which venue is very helpfully described by Ann Treneman of The Times of London – who was there and was evidently not impressed – as “a sixth-form college just off Holloway Road in North London, which may be home to the most kebab shops in Britain”.

Mr Clegg began his speech setting out the government’s plans for political reform – focusing on what The Liberal Democrat Voice (an unofficial website run by a collective of Lib Dem bloggers) calls “three more Rs: repealing infringements on freedom, reforming politics and redistributing power” – at about 11.15 a.m. British Summer Time. He was late, again helpful Ms Treneman informs us, adding that this seems to be a habit with the man. “Clegg-time,” she announces, “runs about 15 minutes behind BST.”

Be that as it may, The Liberal Democrat Voice launched the full and unexpurgated speech online at 2.21 p.m. of the same day and by 5.34 (our time), industrious little Maltastar had already picked the reference to Malta and came out with the story. The parting shot: “Malta has been branded the most centralised country in Europe by the new Deputy Prime Minister of the UK, Nick Clegg.” The morning after, this newspaper caught up and announced that “Nick Clegg, the UK’s Liberal Democratic deputy Prime Minister, yesterday labelled Malta as the most centralised country in Europe.”

The not-so-subtle difference between “branding” and “labelling” Malta as the most centralised country in Europe will not be lost on those familiar with our own political universe. That, however, is not the issue here. What did the Liberal Democrat member for Sheffield Hallam (with 27,324 votes, the choice of 53.4 per cent of electors from this largely rural constituency and term-time home to a considerable student population studying at Sheffield and Sheffield Hallam universities) actually say about Malta?

If you really want to get to the bottom of this, the best thing you can do is read the full text on The Liberal Democrat Voice. Go to libdemvoice.org and look for A Power Revolution: Nick Clegg’s “New Politics” Speech. Malta is mentioned once in the text totalling 2,415 words. What does the Lib Dem leader (since 2007) say about our fair isle, meaning the Maltese islands, not the idyllic rock 25 miles south west of the southern tip of the Shetland mainland in Northern Scotland, home to one of Britain’s best managed small communities and renowned for its successful application of principles of environmental sustainability?

The man – a former journalist and MEP – said: “Britain was once the cradle of modern democracy. We are now, on some measures, the most centralised country in Europe, bar Malta.” To which Ms Treneman of The Times, again most constructively, retorts: “Bar Malta? Only a former MEP who is also a Lib Dem would care. I can hear the Libs now: ‘My God, we can’t be as centralised as Malta, let’s have a power revolution.'”

Significantly, in the summary of the speech published by the Liberal Democrats’ official website libdems.org.uk immediately after it was delivered, the reference to Malta is omitted. I very much doubt that the official site of the junior party in Britain’s shining new coalition government censored its leader’s first big speech as Deputy Prime Minister to avoid diplomatic trouble with Lawrence Gonzi’s government. The more sober and realistic explanation is that the reference to Malta was not central to the message and could, therefore, be safely cut. Meanwhile, I would not worry, as one J. Martinelli commenting online on this paper seems to do, that this episode “doesn’t bode well for future relations with Britain’s coalition government”. How provincial!

The key to understanding the reference to Malta lies in an article by Mr Clegg himself in The Independent the day after the speech, available online on www.independent.co.uk. He again refers to Malta in the context of his plea for a “radical devolution of fiscal powers” intended to reverse a situation where “up to 80 per cent of all local government funding comes from central government”. Only Malta beats Britain on this score. We are fiscally more centralised because the power of taxation and of expenditure is as good as completely in the hands of central government. The Lib Dems want more fiscal power for local government.

In Malta, only fools would rush to thread on such dangerous terrain. In a country where – let’s admit it – most are not at all comfortable with how central government is exercising its fiscal powers, the good sense of calling for a radical devolution of fiscal powers to local councils is not at all obvious. Mr Clegg’s argument, however, is part of a broader concern with the centralisation of power generally and this is an issue that is very relevant to us. His concern with more open and accountable government should be the concern of all decent citizens in our country. Too much is invisible and unknown to the voter, to the taxpayer, to the consumer of public services.

This article appeared in Dr Vella’s regular column on The Times Of Malta on May 24, 2010. The original can be retrieved from http://www.timesofmalta.com/articles/view/20100524/opinion/bar-our-bitter-sweet-fair-isle


Long shadows

Posted in 1 by Editor on May 17, 2010

“… reality”, Lino Spiteri noted in his Talking Point of March 29, “has to be admitted and faced, otherwise one slides very quickly into a state of denial”. He was referring to the Greek crisis and the severe problems confronting Portugal and Spain’s public finances. While emphasising that the “size of Malta’s problems is nowhere near” theirs, he warned that “allowing for size, we do have problems which continue to cast a long shadow, especially over the next three years”.

As we observe the plight of Greece and other countries that, “among those in the eurozone (…) have run into a brick wall, but only more so”, it is difficult not to exclaim that “there, but for the grace of God, go we”. Only those among us who have blinkers irreversibly welded to the sides of their thick skulls will disagree with Mr Spiteri’s statement that the Greek and other cases “shout out a loud lesson that those who believe that, by adopting the euro, one has bought insurance against all odds, are very gravely mistaken”.

Dark fiscal skies

To confirm his view, as if it needed any further confirmation, he referred to the European Commission’s recent pronouncement on the state of our finances, especially its assessment of Malta’s financial plans for 2010-12. Contrasting this newspaper’s detailed account of the view from Brussels with the “rosy” version of it dished out by the Nationalist media, Mr Spiteri remarks that “gutting it for highlights demonstrates that the fiscal skies are still dark with no rainbow in them, let alone any pot of gold at its end”.

Translating Brussels speak into plainer language, Mr Spiteri tersely summarises what the Commission thinks of our public finances: “… we do not have a crisis but, without further expenditure retrenching and possibly higher taxation, we could move into one.” The Commission document itself makes interesting reading and I recommend you invest a quarter of an hour on it. Who knows, you might come up with a different interpretation of it. You can retrieve it from http://ec.europa.eu/economy_finance/sgp/pdf/20_scps/2009-10/03_commission/2010-03-24_mt_recommendation_for_co_en.pdf. Let’s go back to Greece.

It is of vital importance that we do not get cause and effect in the wrong order here. The cause of the Greek crisis is not the package of drastic measures (tax increases and expenditure reduction, including wage freezes and pension cuts) imposed by the European Union and the International Monetary Fund as a condition for their $143 billion bailout. Which is not to say that this – as IMF’s John Lipsky euphemistically put it – “strenuous programme of fiscal adjustment and structural reforms” will not hurt the Greeks very much. On the contrary. The legislation passed last Thursday by the Athens Parliament will slash take-home pay for 20 per cent of the country’s employees. Strenuous indeed. Moreover, it may well slow down the economy so much that it will make its revival even more difficult.

As The Washington Post’s Steven Pearlstein observed: “Greece now finds itself in a trap where the only way it can refinance its crushing debt load is to drastically cut spending and raise taxes but doing so will almost certainly plunge the economy into such a deep recession that incomes and tax revenues will fall and the government will be unable to meet its debt service requirements.” This possibility is even more galling when you consider that the markets themselves seem to consider the bailout fund (that is, what ordinary Greeks are being forced to pay for with cruel lowering of their standard of living) as being too little and too late. True, European leaders wasted precious time and allowed markets to lose further confidence in Greece and in other “peripheral” European economies. Would Angela Merkel and Nicolas Sarkozy have finally switched on their green light had it not been for the impact of a Greek default on German and French banks? True, the European Central Bank’s denial of the threat of contagion has not been of much help.

…and corruption

But none of these caused the Greek crisis for the simple reason that effect cannot precede cause. Again Mr Pearlstein: “There is little doubt that Greece’s debt crisis is of its own making, the result of corruption and tax avoidance and that seductive Mediterranean coupling of high living and low productivity.” I don’t know about the Mediterranean jab (clearly an instance of what Edward Said refers to as “orientalism”) and I am not sure about the generalisation regarding low productivity, but what about the rest?

It is relevant that when, last Thursday, George Papandreou begged ordinary Greeks to patiently bear the brunt of the sacrifice for a state of affairs they are not directly responsible for, the Greek Prime Minister promised to heed the Greek people’s call for a crackdown on corruption. Clearly, he is acutely conscious of the fact that corruption is one of those problems that continue to cast a long shadow over his remaining time in office.

Mario Vella

This article appeared on Dr Vella’s regular column on The Times of Malta on May 10, 2010 and may be accessed at http://www.timesofmalta.com/articles/view/20100510/opinion/long-shadows-from-greece