The lull before the storm

Not all businesses are affected by the political crisis in the same way. The leisure industry is one of those sectors, which has not seen a lull in business, leading entrepreneurs claim.

"The major issue really is the negative economic situation which has engulfed the eurozone but apart from that we are not experiencing a particular lull in business," Ian De Cesare, Managing Director, Eden Leisure Group told MaltaToday.

However, De Cesare contends that uncertainty is not good for any business.

"On my part, the entertainment scene does not suffer so much in times of instability since people tend to simply keep on living anyhow, whether it's flocking to the cinema or a game of bowling, it won't hurt their pockets so much".

Neither has tourism been particularly affected.

"From the hotel's point of view, Intercontinental seems to have registered good results during the first quarter of this month," he added.

Another leading entrepreneur in the tourist sector concurred with De Cesare. "I doubt whether tourists care if elections are held in a country where elections are being held unless they hear, God forbid, that people are being shot in the streets!"

But he still expressed concern about the risk of prolonged instability.

"Election fever begins to grip the nation weeks ahead of the actual polls, and the majority of citizens are fully absorbed in the election debates and the other activities like campaigns and discussions.

One of the main concern in the entertainment scene at the moment is that party promoters are hardly risking booking international artistes to come over to Malta to perform since if an election is called the event might clash with political party meetings/street parties.

"This is the only factor that creates a lull in the entertainment scene from a businessman's point of view," he added.

The prospects of calling an election in March now look uncertain following last Wednesday's dramatic vote of confidence result. So the PN government can continue to govern comfortably as planned adopting a wait-and-see attitude until the end of its five-year term which expires next year.

Some argue that it's a matter of time that an election is called prematurely with an accident-prone Prime Minister.

A businessman told MaltaToday that he was not worried about this temporary lull in business, because "normally, after the elections, things return to normal and business is back in full swing".

But the same businessman was not eager for an early election aimed at eliminating uncertainty.
"Early elections severely eat into profits of all businesses. But now the effect has become much milder, since Malta has sort of gotten used to the idea of an early election!"

One of the risks faced by the economy is that the wait for an election can make the market jittery.

"But an early election could bring businesses to a halt for a period of time until it's over, especially with businessmen investing in big projects".

But he would not be surprised if an early election is held.

"This government has been tested by its backbenchers a number of times in a spate of a few months, an election can happen any day from today. It's just a matter of time."

In response to the events that took place on Wednesday, Labour leader Joseph Muscat said that "Prime Minister Lawrence Gonzi is endangering the jobs of the nation by not calling an early election and is simply in denial, despite the outcome of the unfolding events. He has taken everybody for a ride and now is taking himself for one".

In the light of the Opposition leader's comments, an entrepreneur that owns a string of leading clothing outlets said that he hadn't really seen a drop in business, however business had long been gradually waning over the past years.

"It all depends on what business you own. Not all businesses are affected. If one is working on some big project, it's a totally different issue.

The worst scenario according to this businessman would be an election in the midst of summer as this would have a marked impact on the tourism sector which is fundamental for the economy.

 "If the government keeps dragging its feet and uncertainty keeps rising, in the end everyone will suffer. It's a Catch 22 situation," the clothing shop entrepreneur added.

Meanwhile, Tony Zahra, President, Malta Hotels and Restaurants Association, said: "The political difficulty during the last days has not affected bookings for hotel accommodation originating from abroad however our restaurant members have indicated that there has been a small decrease on last January's  revenue during this month.  It is not possible to identify if this is due to the present political problem or the problems abroad which tend to get substantial coverage in Malta and might be acting as a dampener on the local consumers.         
 When asked what MHRA think should be done to find a solution to the current political situation, Zahra said: "This is a political problem and it should be the politicians that should resolve it.  We are hoping that our politicians and political parties are mature enough and have now been exposed enough to similar situations abroad to be able to resolve this minor difficulty as mature adults and European political parties.
"Also, the country must acknowledge that this situation is a minor political problem especially when compared to what happens in other countries -  to cite an example -  Belgium were not able to  form a government for over  570 days (nearly two years)  after their last election some tow-and-a half-years ago - yet everyone in Belgium  still went about their business  and the country still functioned  - so why should Malta after a few days of political hype, not be able to function as normal?   
 
And when asked for MHRA's opinion if the current crisis is affecting tourism, Zahra added:
"We do not believe that tourists decide to come to Malta or not just because we are holding an election.  However, the Maltese tend to make a mountain out of a molehill which could lead to less spending when it comes to dining out."