His heart is not in it!

The Leader of the Opposition has his future riding on the outcome of the general election and he is not about to court another disaster by saying the wrong thing. He is desperate to convince the sensible voter that in all controversial matters he is Mr Mainstream after all. In the past he would have made a pact with the devil to get what he wants.

So now it is no big surprise that he is turning into Mr Congeniality, even agreeing to keep Malta in the EU and - wonder of wonders - even agreeing that as Prime Minister he would not back out of the euro adoption timetable. But is his heart really set on the euro?

It was not that long ago that he threatened to bite the tongue of the EU's Enlargement Commissioner though, in fairness to Dr Sant, the threat sounds less bloody in Maltese. It was even more bizarre when the same Alfred Sant tried to turn his defeat in the EU membership referendum into a make-believe victory, leading his throng to a surreal victory celebration.

Dr Sant has given reasonable voters a thousand reasons for their nagging doubt on whether he will ever mature in judgment or control his precipitous ways.

Has he truly broken out of Old Labour's mould? Will Malta keep gliding along smoothly under a Labour government, with Dr Sant at the helm? If he becomes the next Prime Minister, what exactly lies in store? Convulsions are written in the MLP's DNA. Would it really be different next time?

At last Monday's conference of the National Euro Changeover Committee, Dr Sant's presence and participation was another signal of his new wardrobe as Mr Middle-of-the-Road. But it does seem to me that there was something missing. Just compare the Leader of the Opposition's contribution to that of the Prime Minister. Sant went on and on about the cost-living consequences of the euro changeover. This is a relevant matter, but hardly an end-of-the-world issue in the bigger scheme of things. It is a problem that we should be able to control. Opportunists must not be allowed to profit from the changeover.

On the other hand, while not ignoring the cost of living issue, the Prime Minister took a broader perspective on euro adoption. He took credit for the cut in the fiscal deficit and the declining trajectory of the public debt.

He noted with pleasure the Eurobarometer poll result that reported majority support for the adoption of the euro.

The Prime Minister lamented the absence of political consensus back when the convergence programme was first presented to the Malta Council for Economic and Social Development. Tough decisions would have been taken with the backdrop of consensus. He predicted gains from the single currency for our trade-dependent economy.

On the other hand, Dr Sant repeated that his party would have delayed euro membership until the economic growth rate reached four per cent or higher. As we all know, the European Central Bank sets out five conditions to be met before a country can adopt the euro. The conditions impose limits on permissible inflation, the government deficit, the public debt, exchange rate fluctuations and the long-term interest rate. Now here comes Dr Sant, adding a sixth: a high economic growth rate.

But the Labour leader's line of reasoning is the wrong side up. Growth is accelerated as a result of the benefits of being in a single currency area, one that includes our major trading partners. As the governor of the Central Bank stated recently, the euro is a necessary condition for growth, even if it is not the only condition. Dr Sant, instead, has the wrong idea because delaying Malta's entry into the euro means delaying faster growth.

Moreover, there is the question of how a Sant government would speed up economic growth, supposedly in preparation for euro entry. Would he use the delay in euro adoption to increase government spending and add to the national debt? That would be a signal for the credit rating agencies to lower Malta's ranking, leading to higher interest rates and higher borrowing costs.

Would he mess around with the exchange rate, pushing up the same inflation rate that he supposedly wants to suppress and also diminishing confidence in our lira?

To his credit, Dr Sant repeated that if the Labour Party came into office before the adoption of the euro, the established timetable would be adhered to. Obviously, he is saying all the right things.

But the audience at the conference was bound to wonder: does euro adoption mean so little to Dr Sant besides the risk of a blip in the inflation rate?

Listening to him, one can only conclude that there are only two dimensions to a Labour government's strategy vis-à-vis the euro: to keep a possible temporary inflation blip at bay and not to sabotage the euro adoption timetable.

Dr Sant insists that a main aim of the euro change must be the safeguard of consumer interests. What he has in mind is the danger of abusive price increases at changeover time. Fair enough.

But there is more to euro adoption than Dr Sant seems to acknowledge.

It is also true that the adoption of the euro will increase the transparency of prices, enabling consumers to relate local prices directly to European prices.

For example, prices advertised on Italian television will be readily absorbed by Maltese consumers and used in purchasing decisions in the local market, adding downward pressure on domestic prices. But this is not the cost-of-living impact that Dr Sant has in mind.

Under the last Sant government, the big screw-ups included the freeze of Malta's application to join the EU and the decision to scrap VAT.

Now, it is magnanimous of Sant to promise us no similar wreck on the matter of the euro.

Thank you very much.

But can he at least pretend that he sees something important in euro adoption?

Why does he talk as if this is not a big step forward for the country but simply an irrelevant event that may cause an initial increase in the cost of living?

micfal@maltanet.net