Labour's No

Speaking at a party gathering in Rabat during the week, Opposition Leader Alfred Sant announced that his party would vote against the ratification of the European Union accession treaty in Parliament, where the debate starts tomorrow. It was too much to expect an unchanged leadership to do an unambiguous reversal even after the party's recent electoral defeat.

There are many in the MLP who want party policy to be brought up to speed. If these same people went with their convictions rather than according to the rule "party first, convictions second", they would help to usher in the coming of age of the long-promised "new" Labour Party.

A piece in Labour's electronic paper during the week expresses the view that the party's leadership issue should not have been deliberated and settled before the completion of the analysis of Labour's election defeat.

Alfred Mifsud writes: "I am meeting an ever larger number of grassroots who are questioning on what basis the leader has assumed that the analysis work being undertaken by an autonomous working group will absolve him from any serious guilt. How has he come to conclude, before the analysis work is concluded, that his continued leadership of the party is in the interest of giving MLP the best prospects for winning the next election?"

The author goes on to set forth the criteria for assessing the efficiency of a political leader. He concludes, "I shall certainly be adopting these criteria when the full facts of what led Labour to its defeat last April are made known through publication of the analysis report now under way."

Perhaps, Mr Mifsud should have supplemented his standards for good leadership with his litmus test for the right policies. Many of us welcome any sign of clarity and closure in the Labour Party's position on Malta's place in the EU but, of course, the party's position on the EU depends a lot on who the leader is.

Unreal logic

Knowing Alfred Sant, there is no surprise that he leads the party in standing its ground on EU membership, keeping it on the wrong side of history. But enough time has passed for him to come up with a better justification.

A party press release reported him as saying that "the Opposition will vote against the approval of measures that when passed by Parliament may lead to a reduction of workers' living standards. By the same token the Opposition will not agree to the ratification of the agreement with the EU."

In almost the same breath, the leader equates the EU with a reduction in workers' living standards. We are all relieved to have a confirmation that the Opposition's no comes "with a sense of realism and at the same time with an acceptance of the rules of democracy," but his explanation for his "no" leaves a lot to be desired.

Dr Sant is out of step with the real world on this point. As the great majority of socialists in the current EU parliament will attest, EU membership brings far greater rights and protection for workers of a new member state. In addition, EU membership ushers in prospects of economic growth that will improve living standards far beyond what isolation could ever offer.

Indeed, some commentators criticise the EU for employment conditions that, they claim, "coddle" its workers. These critics claim that work conditions in EU members burden employers with costly worker benefits, extensive rights and protection that are bestowed on employees.

According to these critics the end results are higher employment costs that discourage private industry. Unpleasant features of the alternative complicate the issue: less worker protection may unleash not only faster employment growth but also wider social inequalities. Rigidity in labour markets can be costly and inefficient, but it also conveys social benefits. The issue is how to balance the two sides of the equation, and avoid losses in international competitiveness while promoting dignity and security for the workers.

In any case, the idea that EU membership is the curse of the working class is a view shared by very few outside our Labour Party. Somehow, Malta's socialists labour in the error that sees EU membership as the instrument that will do the workers in. Malta's socialists have been alone among Europe's socialists in their visceral antagonism to the EU.

Other parts of Dr Sant's speech held more promise. In Rabat, he pledged, "the party will continue to proceed not for vacuous political advantage and not capriciously, but with a firm sense of what is just for our country." He pointed out that the party wants that "measures that are implemented... are truly progressive and they truly open new horizons for... families. With the new reality that will be opened up in our country, the Labour Party will be working to maintain the great social gains that were implemented in the last 50 years."

Fine. The way forward within the reality of Malta's EU membership is for the Labour Opposition to co-operate for a smooth transition into membership and to make the best out of the opportunities that membership will present. "Working to maintain the great social gains that were implemented in the last 50 years" stands a greater chance of success with a greater degree of national unity.

With the signing of the accession treaty, Malta is set on a course that will continue to modernise the economy, and provide the opportunities for a long period of growth and prosperity. The Labour Party should recognise the benefits for those it represents. It cannot truly be against the industrial restructuring that will create viable employment in place of dead-end jobs that existed only at the expense of the consumer.

In its last brief spell in office, the last Labour government left a paper trail showing something quite interesting in its dealings with the EU: it had resigned itself to the reality that protection against imports was soon to be a thing of the past. Why can it not embrace the same reasonableness while it is in Opposition? Isolation is a cul-de-sac that discourages investment and growth, and while protection is a bad idea everywhere, it is an especially bad idea in a small market like ours. In contrast, EU membership opens up a vast continental market for our exporters.

As restructuring takes place in our industries, they would have had an easier time if there were greater buoyancy in our export markets. Our exporters face an uphill task selling in weak foreign markets, while those who traditionally sold in the protected market at home face an equally difficult challenging task in undertaking their restructuring process against the backdrop of soft foreign demand.

In that context, the just-released external trade figures for April are quite encouraging. For the first four months of the year, industrial supplies were up from Lm197 million in 2002 to Lm219 million in 2003. In January-April 2003, imports of capital items rose to Lm72 million from Lm63 million a year earlier. Most of these go into investment and as we know, investment is the key to higher productivity and successful restructuring. The trade data for the first four months also show that exports increased from Lm285 million to Lm293 million - not an insignificant achievement when growth in most of our markets has been stagnant.

Assessment of the performance of our industry is particularly difficult since it has to take into account not just the state of foreign demand, but in particular the volatility in the prices of our exports and of the intermediate products bought by our industries. But trade statistics provide an early sign of likely developments across the economy and in general recent statistics provide grounds for continued optimism.