The currency changeover

It seems there is no end to surprising ourselves as to how much foreigners have more faith in our abilities than us, residents and citizens of this microstate. It may be a question of size or, more likely, of our millenarian colonial past. It may be the daily griping in the press of a few foreign residents with lingering subconscious imperial memories. It may be the result of our fierce partisan culture, itself probably more the product of our small size breeding petty minds.

A few thousand votes can tip the balance at every election. It may be the result of our education system alienating many of us from our Mediterranean roots. Whatever the cause, we frequently succumb to a climate of negativism and self-deprecation or, rather, of blaming every other Maltese fellow citizen or body but ourselves. By concentrating excessively on the warts, however real, we fail to scan the whole canvas and, thus, fail to appreciate our considerable achievements. Isn't it a miracle that 400.000 people live on this barren rock shorn of any resources and yet enjoy a more than reasonable standard of living with no serious social tensions and rifts? Or rather than a miracle, isn't it evident that our resourcefulness and hard work more than make up for nature's parsimony with us?

Looking back, shouldn't we all be proud at what we have achieved together since Independence, a mere four decades ago. Politically, we have moved on, naturally not without controversies, which are the very essence of vibrant democracies, to join the most exciting experiment in the modern world. But we have succeeded in avoiding the bloodbaths, the rampant corruption and the dictatorships of almost all newly-independent countries.

In the economic sphere we succeeded in twice totally restructuring our economy. First we transformed our fortress economy to one based on industry and tourism and now we are successfully graduating to a modern service and knowledge-based one. Not without pain but we did it and we will do it again! Despite our passion for self-flagellation and the numerous Cassandras and Jeremiahs!

The same is happening with regard to our plans to join the eurozone. Why did it have to be foreigners to shake us out of our doubts? First a progress report by the European Commission lauded Malta's detailed and comprehensive plans though rightly pointing to still unaddressed pitfalls. The report particularly commended Malta for taking consumer concerns seriously. "Malta's plans are among the most comprehensive and very ambitious. We are very satisfied with the overall scenario ..." This is not a quote from a speech by the Maltese Prime Minister. This has come from the lips of Benjamin Angel, the official in charge of eurozone enlargement in the Cabinet of Economic and Monetary Affairs Commissioner Joaquin Almunia. It is a tribute to Lawrence Gonzi's government as well as to the National Euro Changeover Committee (NECC) so ably led by the widely-respected Joseph F. X. Zahra.

Important in the context of local controversies, Mr Angel declared that he had no reason to doubt Maltese statistics which are regularly assessed by Eurostat. Surely no one believes that this body, autonomous of other EU institutions, is dancing to the Maltese government's tune. So much for Alfred Sant's and his apologists' berating of local statistics and the Central Bank unless they confirm their doom and gloom depiction of the Maltese islands! Given the occasion, it is not so surprising that Dr Sant did not touch the subject.

Still, Dr Sant's address at the national conference on the euro changeover must have come as an anticlimax. Not that he sank so low as in his Sundays' homilies. Nor did he threaten to sever anybody's tongue. But even in the presence of a well-informed audience and knowledgeable foreign experts he tried to justify his party's, or rather his, initial stand on the early adoption of the euro and the recent U-turn. He cast doubts on foreign studies that had shown that real, as opposed to perceived, inflation was negligible, on grounds that most of these studies had been conducted in the interest of government and financial bodies. He berated the local preparations claiming that consumer representation was almost non-existent.

His most recent conversion is welcome; and how! It makes the work of NECC all that easier and the path to the changeover so much smoother. But like all acts of convenience it leaves a sour taste. Naturally, we would be asking too much if we were to expect him to own up to his mistakes. He did it once when he had been just elected to the leadership of the party, expressing his surprise at the extent of the beneficial economic outcomes of trade liberalisation. Since then he never did it again. Take VAT as the most distinct example. It won him an election. He discarded it only once it threatened to help lose him another.

Voices friendly to the party, if not to Dr Sant himself, warned repeatedly that by opposing euro adoption he risked repeating the strategic blunders of the 2003 election all over again, thus losing an election that in their opinion was as good as won by Labour. Dr Sant's round about turn, even if for the wrong reasons, puts economic operators' minds at rest that they will not be submitted to three costly changes in our currency as happened in the case of our main consumer tax. But it is still worrying that Dr Sant cannot appreciate the significance of the benefits of adopting the second strongest currency in the world. He is the alternative Prime Minister. He admits that the euro has to be adopted sooner or later. He says that Malta should have joined the eurozone once the economy grew stronger. It's worrying that he put the argument on its head. How cannot he appreciate that by eliminating currency risks and cutting costs the euro would make the Maltese economy more competitive and, hence, the growth he wants to see could be facilitated?

Naturally both we as the government and NECC must address the problem of perceived inflation. We do not expect any help from the opposition. The issue, unless addressed, could prove to be their golden opportunity and our downfall.

Dr Sant and the Labour Party have proved themselves wrong on all the major political and economic issues of the last 15 years. How can the electorate leave their destiny in the hands of people who have proved themselves so consistently wrong and only saw the light due to the courage and persistence of Nationalist governments to reform?

Dr Deguara is Minister of Health, the Elderly and Community Care.