Two years ago, the Nationalist Party came back from behind to celebrate a dramatic election victory by a mere 1,580 votes. Herman Grech takes a snapshot of the government's second year in office.

Nationalist supporters were still carcading on the streets celebrating a third successive victory at the polls when signs emerged that Lawrence Gonzi may face an uphill struggle.

With political heavyweights like Louis Galea failing to secure a parliamentary seat, former ministers upset at the way they were dismissed, and some new MPs demanding a bigger role in the government, Dr Gonzi was dogged with internal problems from the beginning - and all this amid a looming global recession.

Many said they were just teething problems until his wafer-thin parliamentary majority got to work - but the notion of dissent became louder during Dr Gonzi's second year in power.

The electoral motif 'Gonzipn' might have won the Nationalists the March 2008 election but the implications of this strategy have sometimes served as a noose around the Prime Minister's neck.

Dr Gonzi has consistently been accused of living in a self-imposed cocoon, lending an ear only to a handful of advisers. Internal party wounds, which festered through the many leaks, showed disgruntled backbenchers were upset that they were being kept in the dark - a dangerous state of affairs in a government with a one-seat majority.

Yet many said the backbench rebellion was a result of Dr Gonzi's reluctance to exercise his authority and put his foot down with undisciplined MPs seeking personal glory.

There was clearly a communication problem which created unnecessary rifts, including the well-known public fallout with outgoing EU Commissioner Joe Borg.

John Dalli, who assumed the self-given role of 'father confessor' for the disgruntled within the PN parliamentary group, is Malta's new Commissioner in Brussels, and Speaker Louis Galea has been nominated for the EU Court of Auditors. Inadvertently, midway through the legislature, the PN group is rejuvenating itself, though some wonder whether it has lost too much experience in one go.

The Prime Minister has seemingly cooled, at least for the time being, the simmering discontent in his group, thanks in particular to a proposal to 'twin' backbenchers with ministers.

Yet despite the internal problems and the worst international recession in 75 years, the government cannot be criticised for its handling of the the economy, and the number of reforms currently underway show it is delivering on certain fronts.

While the economic performance of countries like Greece and Spain have sent alarm bells ringing across the EU, tiny Malta has ventured on, despite the odd hiccup, without the need for tough austerity measures.

But while, on one hand, the government should be applauded for incentivising sectors that are producing jobs, it once again dealt them a major blow by hiking up water and electricity prices, making it impossible for some of the same companies it is assisting to prosper.

The economy

Dr Gonzi said he was putting jobs at the top of his agenda - and the results are clearly paying off.

The government should be credited for coming up with schemes intended to create jobs, even if the initiative came at a cost to the deficit. No less than €80 million was handed out in various investment schemes which benefited 2,194 businesses or individuals.

Along with Germany and Luxembourg, Malta has the lowest jobless rate in the EU, statistics show. During the last budget a record sum was allocated to education and more money was pumped into the Employment and Training Corporation, which last year found jobs for over 4,000 people.

Dr Gonzi said he expects the country to exit the recession by June, probably after most other EU states. The slowdown hit the island after other EU countries - but employers' associations have warned that the new energy rates can only serve to prolong the recession. In 2009, there was a decrease of €663.7 million in imports and a drop of €432.8 million in exports.

The deficit at the end of 2009 was 3.8 per cent for 2009 (above the permitted EU threshold) while government debt outstanding at the end of January was up €295 million compared with January last year.

The government insists it cannot loosen the fiscal belt if Malta is to avoid emulating Greece's economic haemorrhage.

Mepa reform

The long-awaited reform, which promises to cut down waiting time, inject transparency and streamline activities, is finally being discussed in Parliament.

Hailed by several organisations, criticised by other NGOs who felt it was not far-reaching enough, the consensus was that any reform to what had become Malta's white elephant had to be good news.

But after years of controversy, where it was accused of corruption and blamed for contributing to environmental disasters, it will take years for the public to trust Mepa.

Valletta project

Renzo Piano's proposal for the Valletta entrance was inaugurated with much ado last June. But once the celebratory fireworks settled, there has been mounting criticism of the plans - with artists in particular criticising the decision to locate the new Parliament building in Freedom Square and to turn the former opera house site into an open-air theatre.

Malta has the best chance to see Valletta's entrance being revived from the wrath of war and the architectural disasters of the 1960s. In the meantime, away from major controversy, St George's Square and St Anne's Square in Sliema were given a much-needed facelift.

Illegal immigration

The number of boat people fleeing Africa dropped drastically in the past year - not thanks to any EU intervention, but due to a pushback deal struck between Italy and Libya, through which Malta benefitted as a third party.

The deal was criticised by humanitarian organisations but the government decided to sit on the fence, fully aware it was walking a tight- rope amid calls for a suspension of Malta's international obligations. The government was right to ignore a proposal by the Labour Party to take a more radical approach with immigration in the run-up to the European Parliament elections.

As Italy questioned the size of the island's search and rescue zone, Malta entered into diplomatic spats with Rome over who should assume responsibility for immigrants saved at sea.

Warden service reform

Proposals for a reform of the wardens system, announced last week, include issuing warning tickets instead of fines for first offenders and incremental fines for repeat offenders.

The proposed changes are, of course, expected to be welcomed in a country known for its indiscipline, but if they serve to educate rather than fill local councils' coffers, then they would have served a worthy purpose.

Popularity

There is little doubting that the popularity of the Nationalist administration has nosedived in its second year. Hefty electricity prices, party in-fighting and a new Labour Party leader were among the factors which led to a PN trouncing at last June's European Parliament elections.

It is the norm for governments worldwide to hit a low ebb midway through the legislature. A survey in The Sunday Times in March 2005 showed 75 per cent of respondents were dissatisfied with the way the government was running the country. That was two years after a general election - and less than a year after Malta joined the EU.

Similar sentiments for the same party in government, two years after re-election, and in the midst of an unprecedented global recession, are therefore not surprising - though there is a growing feeling that the administration is creaking with age and that complacency has set in.

Environment

Government aid for alternative energy projects, such as solar water heaters and photovoltaic cells, coupled with more waste separation schemes meant environmental awareness is finally on the agenda.

But more drastic action is needed - and fast - to counter years of inertia. Illegal groundwater extraction remains rampant - and has the government's blessing - despite experts' advice that Malta could soon run out of this irreplaceable natural resource.

There have been delays to drawing up renewable energy targets, there are still no concrete measures to reduce air pollution, even if the phasing out of old buses should do wonders for the air we breathe.

And serious questions still hover over why the Delimara power station should be powered by heavy fuel. The list goes on.

Health reform

Waiting lists and bed shortages continued to dog the new Mater Dei Hospital.

The stories which made headlines recently did little to inject confidence - a patient was resuscitated in a corridor after suffering a heart attack, a woman gave birth on a stretcher in an examination room rather than in a delivery room, and parts of the Emergency Department and corridors were being used as a ward.

The health reform announced by John Dalli before his departure to Brussels was initially met positively. But as the details started emerging and questions were raised over a crucial proposal which would force people to go to their private doctor, it was MPs on the government side who threatened to derail it. New Health Minister Joe Cassar insists it is still up for discussion.

Water and electricity tariffs

No union lobbying and street protests could stop another hefty hike in energy tariffs.

The public, especially the working class, is right to feel resentment and say the increases will deal a major blow to their standard of living. In the midst of a recession, and with businesses warning of redundancies, it is probably the most ill-timed decision of the government in its second year.

Consumers should not be expected to suddenly pay for years of waste and inefficiencies - despite the high oil prices.

Public transport reform

The long-awaited proposals include a wider network, new hubs and penalties for misbehaviour.

Commuters are relieved that the notoriously poor bus service is finally being tackled - though they cannot be blamed for thinking why it had to cost the taxpayer €54 million, while giving a 10-year-job guarantee to the drivers who gave the sector such a bad name.