The Labour Party needs to do some urgent soul-searching as it faces the potential fallout from the political and institutional crises that have overtaken Joseph Muscat’s government. Like deer frozen in headlights, its members need to arouse themselves and face the fact, neatly summed up last week by former AD chairman Michael Briguglio, that it has been “hijacked by the Panama Papers gang”. One of those members, Godfrey Farrugia, stood up to be counted yesterday and resigned as party whip.

Labour has been a major force in Maltese political life for nearly a century and has made a considerable contribution to Malta’s socio-economic development. However, it paid a heavy price for the way it governed between 1971 and 1987, when democracy was undermined, corruption was endemic and violence became commonplace. That past, as well as its opposition to EU membership, helped keep it on the Opposition benches for nearly a quarter of a century.

In 2013, things finally changed, quite dramatically. Labour campaigned with a new, moderate, liberal, pro-business leader, who reversed the party’s stand on the EU and made good governance a central theme of its platform. This, and disgruntlement with the Nationalists, gave Labour a landslide victory at the polls.

Its last four years have produced impressive economic results. Unemployment is at an all-time low, the fiscal deficit has been turned into a surplus, the national debt has dropped below the EU’s benchmark, poverty is down and the economy is growing apace.

A legacy to be proud of has been building up.

Now, however, it all risks turning sour for Labour. Its golden boy is grappling with a deluge of corruption allegations, at the centre of which is his chief of staff, Keith Schembri. He has dismissed any suggestion of resignation. Perhaps even more shocking is the emasculation of some of the institutions entrusted with keeping Malta on the path of law and order. There is now the risk of serious and long-term damage being done to the sound economy and reputation this government has been pursuing on the foundations laid by the previous administration. This is not a legacy any political party should be relishing.

Speculation has been rife that Muscat will call an election for as early as June – a very bad idea. Malta not only holds the rotating EU presidency until the end of that month – and no Member State has ever gone to the polls while its hands are full with that responsibility – but the allegations of corrupt dealings by the Prime Minister and his wife, as well as by his chief of staff, are now the subject of a magisterial inquiry.

Despite the strenuous denials, an early election would be putting self before country, personal survival before national need. This is where the PL could come to the rescue – and temper the way history will judge it – by waking up from its state of denial, freeing itself from the thrall to its leader and replacing him.

There are plenty of good reasons for doing this. These are just three: Muscat cannot lead the country while under such a dark cloud of suspicion, confidence has been lost in the independence of the national institutions he presides over, and by staying in place, he risks further tarnishing Malta’s reputation, especially to the detriment of the delicate financial services industry.

This is far more than a question of proving his own innocence. His past failure to act on the Panama Papers leaks means personal acquittal would not change anything of the above, and neither would victory at the polls. His appeal to preserve “stability” in these circumstances rings hollow.

One way forward would be for Labour’s delegates, national executive or parliamentary group to call an extraordinary general conference and vote Muscat out. A new prime minister would take over until the next election, called within a reasonable time. An unlikely scenario, but it is Labour’s chance to partly redeem itself and send a clear signal that Malta is a normal democracy which holds its leaders accountable.

Democracy is healthier when all parties are perceived as viable options at the polls. At this rate, if enough voters see beyond their own pockets, Labour risks making itself unelectable all over again.