[WATCH] Update 2 | President confirms dissolution of House for 7 January

Additional reporting by Jurgen Balzan and Miriam Dalli

Updated with statement from the President.

Updated with comment from constitutional expert Prof. Ian Refalo

The President of the Republic has confirmed that the parliament will be dissolved on 7 January 2013.

George Abela, after meeting the Prime Minister and the Opposition leader, carried out the necessary verifications for the dissolution of the House, and said that after considering that the government cannot be carried out without a dissolution of parliament, such dissolution would be to the benefit of Malta.

Abela held meetings with the Speaker and also the Chief Electoral Commissioner.

Lawrence Gonzi today said parliament should be dissolved on 7 January so as to start an electoral campaign that will culminate in elections on 9 March, 2013.

In a press conference he held in Castille after meeting George Abela at the President's Palace at 10am this morning, Gonzi said the procedure being followed was "a normal one".

Opposition leader Joseph Muscat met President George Abela at 1:30pm but had no comment to make on his talks.

"The President will make his own judgement on what is to be done. I confirmed the agreement I had with the prime minister and that the parliament will be dissolved on 7 January 2013."

When asked whether Abela was of the opinion that the House should be dissolved instantly, Muscat turned to journalists saying that this was their assumption. "I confirm the agreement I have with the prime minister, now it is the president's prerogative to pass judgement on this matter."

According to constitutional lawyer Prof. Ian Refalo, while the Prime Minister has three days to advise the President on the dissolution of the House there is no constitutional time-frame or time-limit for the President to dissolve the House following the defeat of a money bill.

Earlier in the day, Gonzi said that from the moment the House will be dissolved, any new recruitment in the public sector would cease except for necessary exceptions.

He was being asked about whether he would be stopping the issuing of new calls, permits or licenses so as not to exploit the power of incumbency before elections. Earlier on, he mentioned Labour's exploitation of incumbency in dishing out government jobs before the 1987 election.

Gonzi's press conference in Castille was a résumé of his Budget speech on Monday evening, extolling his successes over the past years in the face of some very adverse financial conditions.

"With the benefit of hindsight there were many things I could have done differently," Gonzi said when faced with the less successful aspects of his legislature, such as the hike in utility rates, his opposition to divorce, or the €500 weekly salary increase for ministers.

"Once you are in the riding seat, you take certain decisions, sometimes risky or maybe not as good as you wish them to, or perhaps good decisions that are implemented badly. You learn from your mistakes but you move on, and I dare anybody to contradict me on the results we have achieved."

Gonzi yesterday set the election date for 9 March 2013, after seeing his Budget voted down by a majority of 35 MPs versus his 33 government MPs and one independent MP. Nationalist MP Franco Debono voted against.

But Gonzi today warned yet again about heeding to the Opposition's 'populist' pledges.

"This is not a serious way to treat the country... Muscat is warned, the international credit rating agencies are listening to what he says, and if he does not explain his unsubstantiated promises, it will only make things worse," Gonzi said referring to the Labour leader's pledge to reduce utility rates. "I suspect he does not even realise what is even being promised."

Gonzi pointed out that his legislature had been the longest one since 1987, having survived a 12-month struggle with rebellious backbencher Franco Debono to hold down a five-year-and-one-day term.

"In 2008, the electorate answered to the call that 'together, everything was possible'. We faced whatever obstacle or difficulty we had forecasted. We made a clear declaration that we trusted the people, and we made the best choices for country. Today we are returning this country back to the people with results that have been truly achieved," Gonzi said in a 30-minute speech that listed statistics confirming an increase in university graduates, working women and pensioners, and jobs created in the past five years.

Gonzi once again said Malta had managed to keep its structural deficit down to 2.3%, well below Maastricht criteria, and that it would go further down to 1.9% in 2014.

"At not point in our mind would it have cross our mind to do the same thing Labour had done in the 1980s by bloating the public sector with new employees," he said.

"We are giving back a country with less tax burdens then five years ago, with the highest number of students furthering their studies, with 23,0000 students taking stipends.

"We are giving back a stronger private sector... not it is time for the electorate to weigh its options, to decide whom to trust with the leadership of this country. You need somebody you know where you stand with. The people know our economic strategy, but they don't know what Labour is offering as an alternative."

Prime Minister Lawrence Gonzi has emerged from a meeting with the President at the Palace in Valletta, for constitutional advice on the way forward after announcing elections yesterday evening.

He walked back to Castille through Republic Street, after first being chauffeured to the Palace after meeting his ministers today at 9:30am to register the decision that the House of Representatives would be dissolved to make way for general elections on 9 March.

The move was prompted after the government fell when Nationalist MP Franco Debono voted against the budget, a money bill that incurs consequences for any government that does not achieve a majority.

Debono had long warned he would not support the government with transport minister Austin Gatt in the cabinet.

Yesterday the MP said he was "standing up to the oligarchy" he believed had taken hold of the Nationalist government, before voting against the budget.

Gonzi instead focused on the "success of his five years" in government, and berated the Opposition for its populist politics.

He later described Franco Debono as "a closed chapter", dubbing him as being "irrelevant".

Elections will be held on 9 March - a date that happens to be the birthday anniversary of Franco Debono. In 2008, the election date was 8 March.

The campaign will officially start on 7 January, and both Nationalist and Labour leaders have agreed on a Christmas truce before that date. However both parties will be involved in telethons to raise electoral funds.