Last Monday the Minister of Finance presented the Budget for 2012. It seemed to be very much a normal day; “business as usual” as someone has described it. The normalcy element of the Budget can lead to various interpretations.

On the negative side, one may describe it as a budget without any new ideas to tackle the new challenges being faced by the Maltese economy.

If one were to look objectively at the 2012 Budget, one notes a strong element of continuity from the budgets of the last three years...- Lawrence Zammit

On the positive side, one may describe it as a budget that has sought to ward off the challenges without creating havoc. Some people have described it as too prudent, while others have said that it is not prudent enough.

In any case one needs to appreciate three essential historical facts. First, this is the fourth budget in succession that government has had to present in an international scenario of great uncertainty.

Maintaining normalcy at a time of great uncertainty is not easy, as there is always the temptation to take the bull by its horns.

Secondly, government has had to show that it has understood well the messages that have come out of the European Commission and the European Central Bank regarding fiscal policy.

These two institutions have emphasised that fiscal policy should seek to create a balance among three seemingly conflicting requirements, namely the need for economic growth, the need to maintain fiscal prudence and the need to maintain social equity. Normalcy does not always help to maintain such a balance.

Thirdly, no one really knows what the international economic and financial scenario will be like next year. Again, normalcy does not help in such circumstances. Normalcy, in its own way, does not excite anyone, but it does provide peace of mind.

Some may suspect that normalcy provides a disguise for unpleasant situations, but in effect it also provides clarity. Others still interpret normalcy as procrastination, but they forget the proverb that fools rush in where angels fear to tread.

If one were to look objectively at the 2012 Budget, one notes a strong element of continuity from the budgets of the last three years, in terms of its broad thrust and in terms of individual initiatives.

Fiscal consolidation continues but not at the expense of economic growth or employment. In fact fiscal consolidation is being founded on economic growth which will eventually result in higher revenues for government.

There continues to be certain tweaking in the area of income tax and social benefits, without creating any disequilibrium in public finances. There continues to be heavy investment in the infrastructure, seeking to make full use of EU funding; and a number of measures aimed at supporting businesses to invest further continue.

There are two questions that keep coming up.

The first question is whether the targets that have been set by government in terms of growth of the gross domestic product and the level of fiscal deficit are achievable or not. In my opinion next year we could well surpass these targets if the international environment were to improve significantly.

On the other hand if the worst things imaginable were to happen, then we will not achieve these targets. Again this is one of the risks of normalcy – does one plan for the worst and then possibly risk being hoisted by one’s own petard or does one remain oblivious to the external environment and cross the proverbial bridge once one gets to it?

The second question is whether government has enough headroom if the international recession hits again in the coming twelve months.

The statistics presented this week do indicate that there is enough headroom for government to intervene like it did in 2009 to mitigate the impact of a recession. However, no one really knows what sort of headroom government will require, because no one really knows if there will be a recession next year. Again normalcy does not help is such situations.

Yet there is one thing that needs to be remembered about the Maltese economy. Over the last 20 years, our economy has shown itself to be very resilient in times of a difficult international situation, thanks to its flexibility and its versatility and the resourcefulness of the Maltese.

Maybe the drive towards normalcy has also helped us in such situations. And if you will allow me a feeling of nostalgia, we should thank Eddie Fenech Adami and his team for a normal day like we had on Budget Day this year.