All cards on the table

News that the government has signed a memorandum of understanding with China to buy a minority shareholding in Malta's only energy provider has understandably been met with scepticism and concern.

Some of this concern may be justified, some may not, but at a glance the initiative as a whole does seem to be shrouded in excessive mystery, given the sensitivity of the implications.

Besides, the deal in itself has also exposed a deep-seated malaise afflicting Malta's political establishment as a whole. The fact that it had to be a socialist government to enter into this agreement may appear logical, given the close ties forged with China by the late Dom Mintoff in the 1970s. But much has changed since those times, not least, the political alignment of China itself in its dealings with the rest of the world.

The Asian superpower may well espouse communism as its official modus operandi, but the country has also undeniably transformed into a fiercely consumerist society with a keen appetite for foreign goods: a far cry from the protectionist empire of Mintoff's time, as conceived by Chairman Mao.

Above all, China is known to be eyeing Europe's energy sector as a potential market for its own exports. It therefore remains to be seen whether the acquisition of a stake in Enemalta represents a first step towards a larger presence in the European energy market.

From this perspective, Malta looks from the outside to be toying with a possible change of its internal energy strategy - from a jealously guarded State-controlled monopoly to a gradual release of control by the State in favour of private, multinational ownership.

Nothing particularly wrong with the model in itself: it is in fact how the rest of Europe's energy sectors tend to be administered. But there are well-known geographical constraints that have to be taken into account, constraints which have allowed Malta to successfully defend a State energy monopoly that would otherwise run counter to the free market economy model favoured by the EU.

Hence the paradox: as things have turned out, it is now the socialist government led by Joseph Muscat that is taking steps, however cautious, to dismantle this same State energy monopoly. And it is the traditionally centre-right Nationalist Party that openly questions the wisdom of 'privatising essential services', having apparently forgotten its own efforts in much the same direction carried out only a few years ago.

After all, it was a Nationalist government that privatised the distribution of LPG gas in Malta, among other services which can realistically be described as 'essential'. It was also the PN which privatised the airport - including the runway, an all-important strategic asset which is now in a private company's hands.

Likewise Labour vehemently complained in the past each time the Nationalist administration resorted to 'selling the family silver' to meet its financial requirements.

But the malaise runs deeper than a mere case of political schizophrenia. Throughout Malta's on-and-off love affair with privatisation, the justification (if any were needed) for each individual sale of a national asset has always been overshadowed by forces outside any government's immediate control: namely, government debt.

The same consideration raises particular concerns over the memorandum of understanding with China. It is an open secret that Enemalta has incurred a debt of over €800 million, and that this same debt lies at the heart of the constant threat of infringement procedures imposed by the EU.

From this angle, one might be tempted to argue that any deal, with any country, that can alleviate this apparently irresolvable financial burden should be welcomed with open arms. But there is a danger to that argument. Taken to its logical conclusion, it undermines Malta's energy sovereignty and places the country directly at the mercy of foreign aid for its very survival.

Then as now, there may even be foreign policy implications to a deal with China (or other international partners, if it ever comes to that). When a country finds itself over-reliant on foreign investment to meet its most basic needs, it runs the risk of losing sovereignty over its pronouncements on the international stage. Will Malta be able to speak freely on such issues as Tibet or Taiwan, with an as-yet-undetermined stake in its only energy company owned by China?

Ultimately, however, the reason why this deal has been met with justifiable concern is that we have simply been given too few details to form a reasoned opinion. Considering that an agreement of such sensitivity has already been signed on the dotted line, it is simply inconceivable that the details are being withheld from the Maltese taxpayer, who remains the most important stakeholder in all such decisions.

It is incumbent on the administration to be fully transparent regarding any commitments undertaken in this sector - especially when one considers that any deal signed today will bind not only the present government, but future ones too.

One therefore expects the MoU to be tabled in Parliament no sooner than the House reconvenes at the end of this month.