Joseph Muscat entered a packed tent in Fgura to deafening applause as people pushed and shoved to get his autograph and the campaign song played in the background.

This was exactly three years ago to the day. With the electoral campaign drawing to a close, Dr Muscat ended the event by professing “blind faith” in the people’s judgement.

He was confident of electoral victory, and three days later, the electorate obliged by voting him into power with a resounding 36,000-vote majority. It was a dazzling victory by any measure but three years down the line much of the lustre has worn off.

Rather than confidently addressing the Labour supporters and “genuine nationalists” who joined his movement, Dr Muscat is today defending his closest people over trusts in New Zealand and companies in Panama.

The Prime Minister, who seemed to be in total control of his party back then, claimed to have become aware of Energy Minister Konrad Mizzi’s New Zealand trust a few weeks ago when the latter submitted a draft declaration of assets.

Dr Muscat initially said he had no problem with the financial set-up as long as his minister declared it and provided full disclosure. Last Thursday he injected a minor qualification when he said that Dr Mizzi’s choice “could have been better”.

More than a week after the controversy erupted, the Prime Minister’s comment could be interpreted as trying to put some distance between himself and Dr Mizzi in the eventuality that more damning information is revealed. But the move so late in the day fails to dispel doubts over Dr Muscat’s handling of the situation and his judgement on the actions of Dr Mizzi and his chief of staff, Keith Schembri, who it transpired had a similar financial arrangement.

The integrity of Malta’s entire political elite is now a matter of profound concern

Dr Muscat then came out on Friday saying he had only learnt about Mr Schembri’s shell company in Panama “when the issue was raised in the media”.

Writing in the Times of Malta last Thursday, Ranier Fsadni, an anthropologist, remarked that in any democracy a Prime Minister should have been livid at being informed about ownership of a Panamanian company after the fact and not before the action was contemplated.

“Any clued-up leader would have ordered Mizzi to close down the Panama company immediately, be-fore the story broke. Muscat didn’t,” Mr Fsadni wrote. If Dr Muscat’s honesty was not to be doubted, he added, the plausible explanation would have to be that the Prime Minister had “seriously lost touch”.

Dr Mizzi first staunchly defended his decision, then said he would be winding down the Panama company after a tax audit he requested from the Tax Commissioner was completed. It was a partial retraction but one that hardly made a difference in the days that followed.

The Panama affair has made many in the Labour Party uncomfortable. A taste of this unease was provided by Education Minister Evarist Bartolo in a Facebook post last week quoting former deputy leader Ġuże Ellul Mercer about the reasons that he militated in the ‘workers’ party’.

Sources in the party have spoken of bewilderment as fresh information and questionable links keep surfacing on Daphne Caruana Galizia’s blog. Despite making serious allegations of corruption and money laundering, she has not been sued by the Prime Minister, Dr Mizzi and Mr Schembri.

Labour insiders fear the Panama affair may be bigger than what has been revealed so far, and they feel this has undermined the trust of middle-of-the-road voters.

There will most certainly be political fallout, but how far and deep it runs has yet to be seen.

According to Edward Warrington, professor at the Public Policy Department at the University of Malta, the Panama affair has permitted the Opposition to strike again at a minister who is close to the Prime Minister.

He notes that the energy minister and Justice Minister Owen Bonnici came into the Opposition’s sights barely four weeks after the resignation of planning parliamentary secretary Michael Falzon.

“With his chief of staff also being linked to the Panama affair, the Prime Minister is under greater pressure now than he was in December 2014, when a Cabinet heavyweight [Manuel Mallia] was dismissed,” says Prof. Warrington. He believes another high profile resignation, if it occurs, will weaken the Cabinet line-up and could damage the Prime Minister.

The situation has left many, like Godfrey Grima, a political observer, wondering how this government has had to contend with one problem – some would call it a mistake, others a scandal – after another.

“I find it difficult to understand how in just under three years the government has got itself into these problems,” Mr Grima says.

But assessing the political fallout is difficult, and its full extent will probably only be known at election time, he adds.

“It remains to be seen whether problems like the Panama affair will outweigh tangible benefits like tax cuts and free childcare that people have been enjoying since 2013,” Mr Grima says.

Any clued-up leader would have ordered Mizzi to close down the Panama company immediately, before the story broke

The Panama affair is “a blunder”, he says, which appears more sinister when people start conecting the dots and linking the companies with meetings in Azerbaijan.

But he gives the energy minister the benefit of the doubt, blaming the shenanigans on poor advice given by Dr Mizzi’s financial advisers.

“Panama is not half as bad as it used to be and the country has been trying to clean up its act, but what counts in politics is perception, and Dr Mizzi has ended up in the news for the wrong reasons at a wrong time for his political career,” Mr Grima says.

Society expects politicians to be the beacons of propriety, and the fact that Dr Mizzi chose a foreign jurisdiction over Malta makes things worse, he adds.

The controversy has inspired a satirical song by Joe Demicoli, which hit a raw nerve with its references to money secretly stashed away in Panama.

But more significantly, it has emboldened the Nationalist Party to call for a national protest against corruption to be held this afternoon.

PN leader Simon Busuttil will most certainly want to tap into public anger and dejection over the Panama affair, but in doing so he will have to tread carefully.

Given the actions of some ex-ministers, the PN has credibility issues that the Labour Party has gone into overdrive to exploit in recent days.

Facebook has been flooded with memes of former PN ministers and the ‘scandals’ they were involved in. The Labour Party also took out full-page adverts in the General Workers’ Union daily L-Orizzont to remind people of the €500 weekly increase in ministerial salaries under the PN.

How effective Labour’s criticism will be remains a big question mark. But in January, the Prime Minister told supporters at the Orpheum Theatre in Gżira that it would be useless to dwell on the past and list the scandals that rocked the country under the PN. People were interested in the future, he added.

He pledged to take good governance “head-on” and insisted the Opposition leader lacked the moral authority to speak of corruption.

Dr Muscat was speaking in the wake of Dr Falzon’s resignation following the Gaffarena scandal. Now, just over a month later, he has to contend with another major problem on his hands, which involves two of his closest friends.

Prof. Warrington says that constitutional democracy sets demanding standards of conduct for those who hold high public office.

“Serious violations of those standards, such as Malta has experienced unrelentingly for the past 15 years or so, in every branch of the State, corrode the legitimacy of institutions and politics. The integrity of Malta’s entire political elite is now a matter of profound concern,” he says.

Blind faith, it seems, is no longer a currency people offer at will.