Gonzi’s optimism dampened by Franco Debono’s missive against Castille oligarchy

The economy and political crisis were the heart of a debate between the Prime Minister and the Opposition leader today, but as Lawrence Gonzi rebutted claims that his political crisis was preventing him from governing, his maverick MP Franco Debono dampened the prime minister's confidence as he railed against the 'elitist rule' of his government.

Speaking during a Times debate at the Intercontinental Hotel, Gonzi refuted claims that his ability to govern was limited by Debono's wavering support.

"I am optimistic that we will move forward [with Franco Debono's support] - I have put my leadership on the line and asked party councillors to vote by secret ballot whether they want to reconfirm me as leader."

But as Gonzi addressed his audience, Franco Debono was also telling The Times that Gonzi's crisis will only be over "when the oligarchy is dismantled, the elitist rule of 'planet clique' comes down to earth."

In a reaction, Gonzi said he had amply answered these concerns by putting his leadership on the line and inviting nominations to contest his party leadership.

"It's not a question of whether Debono is happy or not [with my decision] but of doing what was necessary for the good of our country," Gonzi said - who also admitted he had not been in contact with the MP in the past weeks.

But the prime minister could not commit to the resignations that Debono seemed to be demanding, instead saying his door was open to suggestions as to how address the issue of governance.

Economy and political stability

It was the government's economic record that took centre-stage during the debate, with Gonzi defending his government's levels of national debt, saying this was reaping the benefits from investing money to create jobs and modernise healthcare, education and energy facilities.

Answering to Opposition leader Joseph Muscat's accusation that the government's debt had increased from 69% to 71% of gross domestic product within a year, Gonzi said Malta's economic fundamentals were sound.

"We can get double what we ask for from our lenders," Gonzi said, praising the country's credit status.

Muscat insisted the government was failing its debt-reduction targets, saying 25% of the growth in debt had taken place in the last seven years Gonzi served prime minister.

"Gonzi has a fundamental problem with the new EU fiscal pact, because it specifically addresses the problem of debt. Money is a problem, and we have to pay this debt ourselves, and to pay it off we need economic growth. This growth only comes with a stable government," Muscat said.

The prime minister said any business had to secure loans to invest and create growth and jobs: "Is there anybody in business who does not take out loans to invest, so that they can also employ more people? Our debt is reaping benefits: it's being poured in the infrastructure we need. Take our draining system. We are the only Mediterranean state to treat our sewage before it is dumped in the sea, because the quality of our waters are essential to our tourism sector and our water needs from the reverse osmosis system."

Taking the crisis to parliament

Gonzi emphasised his economic record in a rebuttal of arguments that his one-seat majority, threatened by the wavering support of MP Franco Debono, was creating political instability and that his government was in crisis.

"It is not as much a crisis as it is a challenge," Gonzi said of his undermined one-seat majority. "Political life is full of challenges."

Muscat however accused the prime minister of having taken his leadership crisis to the Nationalist party's internal organs, rather than solving it in parliament.

"His only solution is to win time. Politically it suits him. But it is not good for the country."

Muscat cited Eddie Fenech Adami in saying that economic growth could only thrive in a politically stable environment. "Whatever the prime minister says, there is no stability and it's a problem in government and in parliament - and the solution is not found in his party, but in parliament."

Muscat also said Lawrence Gonzi was filibustering and postponing parliamentary work in a bid to win more time: "Votes are being postponed and parliament is meeting up intermittently. Stability means conducting parliamentary business as normally as usual."

Gonzi said that it was common to have MPs not to agree with the party line: "Hearing Alfred Sant say we made a mistake to enter the EU, means you have someone inside Labour that is not toeing the line. Everybody has their opinion. Disagreement in a political party is a natural thing."

Gonzi added that Malta's sound economic fundamentals had been achieved with a parliamentary majority.

Muscat rebutted, saying Sant was voting with the Opposition. Franco Debono, on the other hand, was wavering.

But throughout the debate, Gonzi declared his optimism that his government would not go for early elections after having defeated a no-confidence vote moved by the Opposition, on which Franco Debono had abstained.

Muscat disagreed with the prime minister's business-as-usual confidence. "The prime minister is trying to embed in the popular psyche that this crisis is normal. No, it is not normal that a no-confidence motion is defeated using the casting vote of the Speaker of the House."

Energy concerns

The Labour leader also insisted that Gonzi had overturned a decision taken in 2006 to have the Delimara power station run on gasoil, and instead had gone for heavy fuel oil. Muscat also committed himself, if elected, to run the Delimara power station on gas, which carries a conversion price tag of up to €60 million.

"The private sector's problems are those of financing, bureaucracy and energy costs which are undermining competitiveness. Our energy policy is clear: we will move to gas. The prime minister on the other hand, has not even considered a proposal by Sargas to create energy without the use of heavy fuel oil."

On his part, the prime minister insisted that energy prices could not be reduced but that his government was considering the proposal of a photovoltaic farm.

Muscat also pledged to make public-private partnerships a cornerstone of his economic policy, and overhaul the bureaucracy that was stifling private investment.

Here the prime minister asked Muscat whether his overhaul of bureaucracy would mean running roughshod over regulators such as the Malta Environment and Planning Authority. "Will you overhaul our environment regulator at the expense of business?"

Muscat rebutted by saying that even the Delimara power station extension's chimney had not yet even been approved by MEPA. He insisted government had to be fair to investors, citing as an example the White Rocks sports complex where government committed a piece of land for development, but which had not yet materialised.

University stipends

The two leaders also sparred over university stipends for undergraduates: while Gonzi said Labour MEP Edward Scicluna had once said that stipends were unsustainable, Muscat said university stipends had already been decreased by the government in 2005. "Even the university rector proposed reforms to university funding and financing university students' education. But the prime minister reappointed him just the same."

Muscat said some €4 million used for the refurbishing of the temporary Malta Enterprise offices at the Institute of Healthcare, and another €8 million for the breakwater bridge in the Grand Harbour could have been easily diverted to finance university stipends.

Gonzi however said university stipends had been streamed to incentivise industries that needed more auditors, scientists and IT professionals. "We need to attract more students to these areas, because if we don't, these industries will look for human resources overseas."