Source: George Mangion¸ PKF Malta
As published on the Malta Independent on Sunday 18th May 2014
It doesn’t rain but it pours when it comes to election fever in Malta. While many relished the lavish celebrations this month to mark the 10thanniversary of Malta joining the EU¸ few realise that the election fever for the European Parliament elections that has gripped the media is fast making us lose sight of the wood for the trees.
The frantic race between the main parties with their coterie of MEP hopefuls is making the faithful weary of the endless bickering and mud-slinging that has suddenly dominated prime-time TV shows¸ with pundits noting the defects (latent and not so latent) of the adversary in a mad race to prove that the unprecedented electoral advantage gained in March last year can be dissipated – or at least partly.
Still¸ it is a pity that marshalling the troops to man the election trenches is inadvertently creating a diversion from reality and temporarily camouflaging our main economic problems. We are otherwise engaged in navel-gazing¸ conscious of the feel-good factor showered upon us by political leaders in the anniversary celebrations – when we felt so proud of being able to enjoy the right to participate in the election of well-paid members of the EP.
But can this enthusiasm blind the nation so that it loses track of problems such as reduced bank lending and¸ in particular¸ the fact that bank charges are creeping up ever higher? The main political parties have been determined to increase their popularity by marshalling – in full regalia – their party faithful to the ballot box with the mantra “absenting yourself from voting means a vote for the rivals”.
I am sure that the election of six candidates to the European Parliament is a welcome opportunity but¸ really and truly¸ it is mathematically insignificant: number wise¸ our six votes count for less than one per cent at plenary sessions. Ergo¸ it is not a case of do-or-die and yet the island is bracing itself for an all-out jamboree at the hustings to score a point. Perhaps it is an important point – but at what a cost!
On the economic front¸ we have a silent but persistent dialogue between the governor of the Central Bank and the banking community regarding the low levels of lending and the relative high rate of interest on loans. The governor reminds us that Malta has the fifth highest bank interest rates after Cyprus¸ Greece¸ Portugal and Slovenia¸ while Labour MP Silvio Schembri¸ who chairs the Economic and Financial Affairs Committee¸ also believes that interest rates are too high for small and medium-sized enterprises – which are fragile and desperate to get credit and expand operations.
All this is happening at a time of disinflation where¸ shockingly¸ our annual rate of inflation as measured in April by the Harmonised Index of Consumer Prices stood at 0.5 per cent (2013: 0.9 per cent) whereas the annual moving average rate was 0.8 per cent and while banks mostly pay 0.3 per cent interest on savings accounts but the top rate charged to industry and SMEs is higher than that dictated