Government & Politics

Muscat’s Second Movement

Malta’s Labour Party just rode to another landslide victory and Prime Minister Joseph Muscat is back on top although analysts had not ruled out a surprise change of government.

Many in Malta had expected a tight race between the governing Labour Party and the rivalling Nationalist Party when Prime Minister Joseph Muscat called a snap election almost a year before the end of his first term. However, with a massive 35,280 vote majority, Muscat secured a second five-year term in office in the general election on 3 June 2017. The Labour Party won 55.2% of the vote, while the Nationalist Party obtained around 43.6% – the highest ever majority achieved by a party in government and Labour’s second consecutive landslide win after their success in 2013.

During the past four years, Malta experienced an unprecedented economic boom with record-high GDP growth and record-low unemployment, which for most of Muscat’s time in office made his re-election very likely. But in the spring of 2017, a series of corruption allegations, some directly linked to the Prime Minister’s family and close associates, started to weaken Muscat’s position. The Prime Minister denied the allegations but called an election. Once reconfirmed in office, Muscat echoed his party’s campaign theme “best time” and promised that the best days for Malta are yet to come.


Malta ’s Political Journey

For more than 150 years Malta was part of the British Empire, a legacy which still influences the country’s political and economic systems. The colonial authorities first granted Malta internal self-government in 1849, but independence did not come until 1964 when Malta became a member of the British Commonwealth, with Queen Elizabeth II as the titular head of state. In 1974, Malta declared itself a republic and replaced the queen with a president. In the 1950s and 1960s a number of smaller parties secured a substantial number of votes and some seats in the legislature, however since 1971 the two major parties – the Nationalists (PN, Maltese: Partit Nazzjonalista) and the Labour Party (PL, Maltese: Partit Laburista) – have dominated the island’s politics.


A Parliamentary Republic

Malta is a parliamentary republic. The head of government is the prime minister who leads the administration for five-year terms. The head of state, however, is a parliament-elected president who serves a more ceremonial role. The country is divided into a proportional representation system. The national government is the responsibility of the prime minister and the cabinet, which is made up of elected members from the general election’s winning party. The role of the president is largely ceremonial, although he or she has the duty of safeguarding the constitution, as well as chairing the Commission for the Administration of Justice. The president also assists in solving political deadlocks in time of need. The island is subdivided into 68 local councils, which form the basis of local government. While responsible for issues such as waste collection and the upkeep of roads, local councils are not responsible for taxation policies. There are no intermediate levels between local and national administration.


Main Parties

The two main political parties, Labour and Nationalist, have alternated in one-party governments in the 12 general elections that Malta has held since its independence. The Nationalist Party adheres to traditional European Christian Democratic ideals, very much along the lines of the German CDU; the Labour Party has roughly followed the trends of its British counterpart, shifting more towards the centre of the political spectrum and adopting a more managerial approach to running the country. Divisions between the two parties have been deep, and most of the electorate has traditionally been closely affiliated to one party or the other.

Both parties have strongly influenced the island’s economic development. A Labour administration governed uninterrupted between 1971 and 1987, during which time government played a central role in the economy, greatly expanding the public sector and social services. When the Nationalist Party was elected in 1987, a process of economic liberalisation began. The country’s infrastructure was overhauled and the state’s role in the economy was reduced. Today, both parties adopt pro-business stances and stress the importance of the private sector in creating economic growth and employment.


New Political Reality

The Labour Party, led by Joseph Muscat, returned to power in 2013 after 15 years of Nationalist leadership. Labour gained 30,000 more votes over the Nationalist Party, and has confirmed its dominance in the 2017 election. Simon Busuttil, then leader of the Nationalist Party, resigned after the defeat in June 2017. Last year also saw the creation of a new party, the Democratic Party (PD, Maltese Partit Demokratiku), a centre-left political party led by Marlene Farrugia. She is a former member of the Nationalist Party, with whom she was elected in 2008 and 2013, before resigning in 2015 and forming the Democratic Party in 2016. She won a seat in parliament in the 2017 election and for the first time since Malta gained independence, there is now an elected third-party representative in Malta’s parliament. Due to Malta’s electoral system, which makes it difficult for small parties to achieve the necessary quota to get elected on their own, the PD had formed a coalition with the PN and both parties campaigned together. Previous attempts of third parties to enter the political arena, mostly by the Democratic Alternative (an environmentalist party established in 1989), were unsuccessful. The Democratic Alternative managed to secure only 0.83% of the vote and failed to win a seat in parliament. Malta’s current president, Marie-Louise Coleiro Preca, is a former minister who took office on 4 April 2014. She is the second woman appointed for the Presidential post, preceded only by Agatha Barbara (1982–1987).

 

 

Early Elections

Elections weren’t scheduled until 2018, but Muscat called the snap election in May as political pressure grew on his family and associates due to a number of alleged corruption cases revealed from the Panama Papers leak. While Muscat has received recognition as a successful social democrat and an advocate of public and private sector cooperation that has fuelled Malta’s recent economic boom, the PM’s critics argue that he has failed to deliver substantial improvement on transparency and accountability. Corruption allegations reached their climax when Muscat’s wife was accused of being the beneficial owner of a secret Panamanian shell company that received unexplained payments from Azerbaijan’s ruling family. Both Muscat and his wife deny the allegations and the magisterial enquiry is still underway. While rumours of an early election had been going around since spring 2017, Muscat’s decision to call the election in May 2017 meant that Malta experienced one of the shortest, however most fiercely fought, election campaigns in its entire history.

 

Electoral Promises

During the election campaign, Muscat promised tax cuts and pension increases, as well as investment in a mass rapid transport system and a €700 million programme to resurface all roads. These were part of a set of proposals devised to support the country’s economic boom. The electoral programme of the coalition of PN and PD focused on good governance and the consolidation of the economy and the creation of new economic sectors. The coalition also promised to offer free childcare to all children, not only those whose parents are in employment, while also promising to cut income tax bands to a maximum of 10% for those earning up to €20,000.

Opinion polls gave the 43-year-old Muscat and his Labour party a 5% lead but also showed many voters were undecided until the vote. Political observers said that it was not the defeat that took the Nationalist Party by surprise but the margin of Labour’s victory. Distrust in the Nationalist Party, a disconnect from the popular mood and a lack of time for the party to renew itself are being seen as reasons for the party’s second defeat. The result also indicates that 2013 Labour voters who switched to the Nationalist Party were compensated by an equal number of people who did the opposite. The fact that Muscat managed to bring home another victory has shaken the Nationalist Party to the core. Together with Simon Busuttil, the party’s deputy leaders and the entire party administration stepped down to pave the way for fresh faces and a thorough party renewal.


First Priorities

Despite their victory, the Labour Party also faces some challenges ahead. The corruption allegations are still being investigated and have also tarnished Malta’s international image. Shortly after being elected Muscat said he wants to unite the country and that he would be extending a hand of friendship to those willing to work for the good of the country. Malta has been under heavy scrutiny since the publication of the Panama Papers and more recently the Malta Files, another whistleblowing investigation. Muscat said the government will continue to defend Malta’s financial industry and its tax system, and many in Malta and abroad will follow closely how the government will handle the strong media accusations and how it will address the matter with the European Commission. Many in Malta also say that it is crucial that the new government does not repeat the same mistakes and failures when it comes to transparency, meritocracy and political accountability. There are also a number of outstanding issues that need to be addressed, such as traffic congestion. Expanding economic opportunities and a cosmopolitan lifestyle do not come without their own risks and challenges, and themes such as sustainability and the environment are expected to receive more attention in the future.


Leading with More Experience

Muscat said that he believes he will lead the country with more experience in this legislature, seeking to learn from mistakes he committed during his first mandate. He has also announced that he will not contest another election. This means Muscat will have to start building up a new leader in the not so distant future. With a new Nationalist Party leader to be elected in the coming weeks too, Maltese politics will be shaped and influenced by a number of new faces in the coming years. It also remains to be seen what role the new Democratic Party (PD) will play in forming a credible opposition. What seems certain is that Malta’s economic performance will continue to be the real litmus test to gauge the country’s overall advancement or stalling. The country will also need to monitor its international reputation to ensure that businesses in Malta continue finding the right conditions to grow their operations.

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