Restructuring 'will cost votes'

Prime Minister Lawrence Gonzi is seeing a big difference in politics and investment since Malta joined the EU just eight weeks ago. Steve Mallia interviewed him about the MEP elections.

Do you believe that the Maltese are making a big deal out of nothing over the European Parliament elections when you consider they are only going to gain a few seats in a parliament of over 700 members?

On the contrary, those five seats are extremely valuable to us and can make a big difference, particularly because we form part of the largest group within the European Parliament so we can exercise substantial influence. This is already happening at the executive level because even though Malta is the smallest country within the group of EU members, we are being consulted continuously on our opinion with respect to who will be the next president of the Commission, how we assess the position regarding the Constitutional Treaty, etc.

Perhaps what we should explain to the electorate is that the European Parliament operates within a committee system and there aren't 700 people within this structure but 15 to 20 people. And there the votes acquire an enormous amount of strength and importance.

But do you think anyone will pay attention to what a few Maltese have to say?

They already have. They accepted an amendment that was put forward by Josef Bonnici. It was accepted by a report which was in turn accepted by the whole plenary session of the European Parliament - so they do take notice.

Have you felt a big difference since Malta became an EU member?

After May 1, Malta's political dimension grew enormously and I can feel it. Also, from the information in my possession, interest from foreign investors in Malta as a result of membership seems to be growing at a relatively fast rate. So the indications are that this has made a big difference - as we had expected. Of course, it is less than eight weeks since we joined so we have to take a cautious approach- but it's happening.

There have been a lot of grand gestures from all the candidates, and PN ones, about their great vision of Europe and this kind of thing. But wouldn't you agree that it has been a campaign completely devoid of any issues?

I think it's a bit of an exaggerated statement to say that it's been devoid of issues. It's been a campaign that has focused on the role that the MEPs should play within the European Parliament. At least our campaign has focused on that and, therefore, there is the need for us to make the best possible choice in the best interests of the country. I have emphasised that it is in the national interest for us to choose the best team of representatives - for a number of reasons, among which is the fact that the EU, and therefore the European Commission and Parliament, are currently discussing the financial perspectives for the period 2007 to 2013. For the first time, Malta has an important say in this. Indeed, we have a veto on the whole process at governmental level. But there is a parliamentary process which is extremely important.

But if a voter came up to you and said: "What can a PN MEP do for me", because that's what people are interested in, what's your reply?

We have spelt this out in the manifesto we presented and we told our electorate that we are guiding our potential MEPs on to five clear areas. In other words, our MEPs will work within the European People's Party in order to attract to Malta all those initiatives within the European Parliament that increase our investment in human resources: education for our young people and workers, exposure to experiences in the labour field, environment - in other words bringing over to Malta whatever is necessary to make this quality leap.

I agree that a quality leap is in the process of taking place but wouldn't you agree that in spite of membership there is still a lack of enforcement with regard to environment, health and safety...

Oh yes, there's a lot more that needs to be done. But a lot is already being done and the decisions we have been taking - including the decision we took on Tuesday regarding the waste disposal issue, waste separation and the way forward - are all extremely important issues. Perhaps not a lot of people have realised that while the Labour Party was busy with a negative election campaign sowing doubts and fear, we were focused on a national agenda, a restructuring process which was moving at a very fast pace. Don't discount the enormous energy that we put into the restructuring of Malta Drydocks, of Air Malta, of PBS. These are major entities that are at the core of the deficit issue in Malta and let's not underestimate our priorities.

But the government didn't address these issues five years ago.

I don't think that's quite correct. We did address the deficit five years ago...

...but not in the manner that it was done after the referendum.

I disagree. If you recall, the first budget of 1999 laid out a plan to reduce the deficit to three per cent over a period of seven years. We were on track up to 2002 and then we had a problem and went off the mark. And there are reasons why we went off track...

...because the government wanted to win the referendum.

Come on, you have to consider the international scenario. We had a global economic slowdown, September 11, and, yes, we had an election and referendum campaign coming up. In the run up to the referendum we had a campaign that was very negative on the Labour Party side, we had an economy which, as usual, slowed down because of the uncertainty that the situation brought upon the country. So that is what happened. It is very unfair to say that the government did not address the deficit issue. On the contrary, we addressed it and started off in 1998 with a disastrous deficit situation which we inherited from Alfred Sant. Slowly but surely we were bringing that down.

In retrospect, do you wish that the restructuring of these big government companies had started earlier?

Yes. I think I can admit that. Having said that, however, it's easy to make an assessment now and remove oneself from the circumstances that existed then. The focus in the past legislature was to make up for lost time on our application for EU membership, negotiating a good package with the EU, having a referendum and convincing the Maltese that that's the best choice for Malta and achieving a result which we are enjoying today. Those are the crucial aspects. However, this does not mean that we did not address issues. The drydocks issue was addressed in 2000 when a task force was set up and the same applies to pensions and health reform. Now that the EU membership issue is over and done with and the subject is supposedly closed we can now focus all our energies on the areas that require immediate attention, which is exactly what we have been doing.

Now, it is important that we choose the five best representatives for the European Parliament. The PN has candidates with ability and a proven track record - some of them actually took part in the negotiations leading to membership. And they proved that they helped the government to negotiate the best package possible.

If you don't get three seats, would you view that as a failure?

No. I recognise that we are moving ahead with a difficult and challenging restructuring programme and we decided to do so because that is in the national interest.

Do you think it is going to cost you votes on Saturday?

I think it will cost us votes, yes.

Are you very afraid of not getting the third seat?

No, I wouldn't say that. I'm confident that the electorate will understand that what we have been doing is at the end of the day in the best interest of the country. I'm confident the electorate will understand that.

It's quite likely that if the PN does not get the third seat, the obvious alternative for the disgruntled PN supporter would be Arnold Cassola. His party have complained that the PN conducted a malicious campaign to smear him with an abortion issue. Do you regret that incident over this campaign?

In all fairness, I don't think the issue should have come up in the first place...

...by the Nationalist Party?

Well, by anyone. Whoever brought the issue up. However, I keep saying that Arnold Cassola is the general secretary of the Greens and perhaps he should be asked a very clear question: Does he intend to remain general secretary of the Greens?

But even within the largest political group there are differences of opinion on all sorts of issues. For example, with abortion I think every country apart from Ireland and Poland has...

Careful. You are touching on issues over which the EU has no competence whatsoever. The point is, if you have a manifesto and there are statements in that manifesto and you happen to be the general secretary, my assumption is that you have written that manifesto. So the issue here is not AD, it is Arnold Cassola, who is AD's candidate, which is fair enough, but he is also general secretary of the Greens.

But people within a party can personally disagree with a standpoint.

But this is not just a person within a party. There is a difference between being a member of a political party and being the general secretary. I was general secretary of the PN. I was responsible for drafting the manifesto and I subscribed to that because I was the general secretary. This difference is not being emphasised enough.

When do you expect Malta to join the single currency?

That is a very important question. I am currently waiting for the technical expertise and advice that has to be given by a number of people, including the Central Bank. A lot depends on us achieving the Maastricht criteria...

...before the next election?

Well, it depends on the decisions that we take. The indications I have so far by technical people are that if other new member states introduce the euro before us, that might have a negative effect on our competitiveness, especially with respect to tourism. So that is an extremely important consideration. However, we have to understand that if we decide to go for an early introduction of the euro, that means that we will have a difficult schedule to follow...

...that could lose you the election.

Unless it's handled well, it could create problems. But it's not an issue of losing or winning the election, it's an issue of what the social impact is on the Maltese community. Can we handle that? Can we do that properly? Can we do that in a way whereby we take the benefits and not the negatives? So we have to wait. I am still waiting for the technical advice.

Do you categorically rule out a devaluation of the Maltese currency?

At this stage, I rule it out completely because that will not in any way help us bring about any improvement in our economic situation.

You said at this stage, so is it something that could happen?

I don't foresee it happening in the short or medium term. Of course, a week in politics is a long time and, therefore, the worst thing I could do is commit myself one way or the other. But my analysis at this point in time eliminates this scenario.