Risking everything on Panama

As time wears on, it is becoming clear that the Prime Minister is reluctant to face up to the scale of the crisis now engulfing his government. 

Although Joseph Muscat has now acknowledged the Panama scandal as a serious issue that threatens to undermine his own credibility, he is still clearly responding to the controversy in the traditional way politicians have always faced crises in this country.

Labour’s first response was to try and turn the tables on the Opposition, by dragging up corruption cases that surfaced during or after the Nationalist administration. Separately, the Prime Minister has also urged us to consider the ‘good things’ achieved under his administration: the reduction in utility bills, economic growth, record employment levels, civil liberties, etc.

All this indicates that Muscat has not yet understood the longer-term implications of this scandal. This is no longer a question of the ‘us against them’ style of politics we have grown accustomed to in Malta; nor can it be reduced to a minor blemish, to be counterbalanced by other achievements.

Even if there is truth in some of Muscat’s ‘optimistic’ self-appraisal, the fact remains that one of his Cabinet ministers has committed a serious foul. Failure to take action with regard to this foul cannot be justified by pointing towards action taken in other areas. Each case being considered on its own merits, the revelation that Konrad Mizzi set up an offshore trust in New Zealand and offshore company in Panama far outweighs other considerations… it is an issue which strikes at the very heart of the question of governance. 

Unlike most other recent political controversies, there is also an international dimension that cannot be ignored. The Panama Papers were not about Konrad Mizzi – though the way they were reported locally looked that way. Lurking beneath the surface is a deep-seated sense of popular dissatisfaction with politics in general. It is not just in Malta that the political class found itself under attack from all angles. In Iceland, the government has all but collapsed under the weight of its prime minister’s undeclared overseas assets. 

And in the UK – closer to home, on a cultural level – David Cameron also faces calls for resignation over similar (though not identical) revelations. The British prime minister knows that his electorate is rightly angry at reading about their head of government having offshore interests… even if the connection to himself is less tenuous. Why should it not be the same for a local Cabinet minister?

This in turn seems to be ushering in a new attitude towards European politics: by and large, people have had enough of shady dealings – not limited only to politics, as the scandal engulfing Italy’s wealthiest also illustrates. In politics, however, there is also the issue of public trust… not to mention rules of propriety and decorum that do not apply outside the public sphere.

In a sense, the Panama Papers fired a warning shot to governments worldwide. There is a tide of global discontent at such arcane financial dealings… and governments may well rise and fall on this basis in future, as the shift in attitude engenders new public expectations of governance.

There is an irony, too: Muscat rode into government on the strength of precisely the same expectations. From this perspective, it is inconceivable that the Prime Minister continues to drag his feet in response to the local ‘Panamagate’, and to resort to purely partisan responses which do not address the crux of the matter at hand.

If Muscat plans to weather this storm merely by relying on the unswerving support of the party faithful, he is clearly omitting significant factors from his calculations. Already Malta’s involvement has been highlighted in the international press. Just as Cameron faces mounting pressure over his own fortune in an offshore company, scrutiny will be brought to bear on the case of Konrad Mizzi and Keith Schembri.

Muscat’s indecisiveness will by that time no longer be a reflection of mere political pique: questions will have to be asked about why a European prime minister chose to seemingly ignore such serious revelations when they first emerged.

The message is clear to Joseph Muscat: a red flag has been waved, whether or not he chooses to acknowledge it. There is only one course of action left for him to take, and that is show Mizzi the honourable way out.

Apart from the immediate reason for this necessity – that is to say, the ethical compulsion to live up to earlier promises of better governance – there is also a political cost to be taken into account. Muscat’s major political advantage has always been his significantly higher personal trust ratings – much higher than his party, in fact – which contrasted sharply with a Nationalist Party that still struggles to fill the void left by Eddie Fenech Adami.

It was the trust he enjoyed among politically uncommitted voters that secured the extent of Muscat’s 2013 majority; and it is precisely the same voter segment he risks losing the most, by refusing to elevate himself to the desired political standards.

If he doesn’t move fast, he will be risking his entire credibility on the damning revelations of the Panama Papers.