[ANALYSIS] The ball in Franco’s court

Despite numerous threats made by Franco Debono in the past weeks and days, the Nationalist Party's executivehas confirmed the ban on his candidature.

In so doing it ignored Debono's warning that he would not vote for the budget as long as his ban remained. It also ignored Debono's other threats: that he would not vote for government as long as Austin Gatt remained in government; that he would present a no confidence motion in Health Minister Joe Cassar; that he would vote against the cohabitation bill; that he would trip government up through his motion against the use of Heavy Fuel Oil in Delimara after voting against a similar opposition motion in 2010 and ultimately that he would found a rival Nationalist Party and contest the next election.

While back in January, the party's establishment had been shocked by Debono's threat to bring the government down and seemed prepared to compromise and appease Debono to buy precious time - to the extent that the PM had to submit himself to a ridiculous leadership contest - this seems no longer to be the case. 

Debono seems to have lost his bargaining chip in his high-stakes blame game with the Prime Minister: the reason being that the prospect that he brings the government down, either during the budget or before, seems to fall in line with the party's electoral plans.

In fact yesterday's confirmation of the electoral ban on Debono raises two possible scenarios: Gonzi himself calling for an election in November - using Debono's threats as an alibi to go for an election before the budget; or Gonzi going to parliament, surviving till the Budget and provoking Debono into bringing the government down in the Budget.

Debono as Gonzi's alibi

Gonzi may well take Debono at his word that he will no longer support government for at least four reasons given in the past days, and advise the President to call an election before parliament even convenes. 

This would see the country going to the polls either in October or November. In either case government would lose the chance of presenting a pre-electoral budget, a step which would defy traditional political wisdom - but which could also be dictated by bleak economic realities.

It is clear that last year's fiscal projections did not match reality.

While the 2012 budget projected a growth target of 2.3%, Finance Minister Tonio Fenech has already revised this figure to 1.5%.

This means that the government ended up collecting less tax revenue than projected this year. Moreover, official data released by the National Statistics Office showed that the increase in recurrent revenue of €72.4 million was outweighed by a sharp rise in total expenditure of €167.5 million. This widened the government deficit by €333.3 million. Although these figures could change by the end of the year, the space of manoeuvre in the next budget is clearly limited.

The only good news for the government is that Malta has continued to weather the international storm with regards to employment figures, which surpass those of most southern European states.

Government's space of manoeuvre is even more limited than in last year's Budget, when government expenditure was kept down by putting some EU co-funded capital projects on hold. With elections in mind most of this spending is taking place this year.

Still, for Gonzi not to be able to present a final budget could contradict his constant pandering to national responsibility. Instead of appearing before the electorate as the man who, despite all sorts of difficulties, managed to keep the unemployment scourge at bay, by going to the polls before a budget is presented he would appear as someone running away from damning figures. 

Historical precedent also warns against embarking on such a path. Back in 1996 Eddie Fenech Adami called an election in October, avoiding the budget but still losing the election after which Alfred Sant found himself wrestling with a gaping financial hole. 

Yet this time around, unlike Fenech Adami in 1996, Gonzi has an alibi in Debono's constant threats. Still, the question he would face if he calls an election before the budget would be: why didn't you do the honest thing and show the people the true state of finances before the election? 

A plausible answer to that could be that the harm of presenting a budget only to have it rejected by parliament just weeks before the Christmas shopping spree would be even greater.  But that begs another question; why not let Franco Debono act like the ultimate political scrooge, bringing on the country the unprecedented prospect of an election announced a few weeks before Christmas?

Bring it on Franco

If he still has space for fiscal manoeuvring, Lawrence Gonzi may well chose to soldier on, leaving it up to Franco to bring about the inevitable and take the blame for bringing the government down. 

Gonzi may still be banking on the possibility that, when it comes to the crunch, Debono will dither under pressure, simply out of fear of the prospect of going down in history as the man responsible for bringing a PN government down. 

Probably Gonzi still prefers to complete the full term and have an election after May but the PM may be more willing to take the risk of Debono doing the unthinkable.

Moreover, even if the government falls over the budget in November, the election will still take place next year probably in February.

The party's decision to confirm the ban on Debono indicates that the party has already evaluated the risk of Debono unseating government in the budget and has concluded that this may well be a blessing in disguise. 

If Gonzi does go ahead with the budget, he would not lose the moral high ground by running away from the figures. While pre-election budget bonanzas may well be a thing of the past, Gonzi may well use the budget to press the point that safeguarding jobs in uncertain times is already an achievement.

But the greatest advantage of embarking on this path would be the political dividends to be reaped by banking on a sympathy vote. The drama of Franco Debono teaming up with the Opposition to bring down government on budget day could be the last hope for Gonzi to rally pale blue voters behind him. 

The impact will be magnified by the fact that Gonzi would have no choice but to go to the President a few weeks before Christmas to present him with a state of fact; that he lost his one-seat majority. Through his act, Debono would suddenly become the bete noire of the retail community who would see their Christmas ruined through his capricious antics. 

But Gonzi faces two major obstacles in his bid to push Franco to the brink.  He would have to survive the treacherous parliamentary waters till the end of October or the beginning of November. Moreover, he would have to have room to present a decent budget, which at least would not leave anyone worse off. Moreover the next budget will also be the first one proposed by the "coalition" and Pullicino Orlando.  

Debono on a rampage

With the party ignoring his threats, Debono knows that he has lost his bargaining chip with government. From now on he is his own man. 

What Debono retains is the power to determine the timing of the next election even if his choices seem to be limited. Debono may be tempted to go on a rampage, causing government as much damage possible to force Gonzi to call an election himself without being actually voted out in a budget vote. 

In fact, Debono's first 'tit for tat' following the confirmation of the ban by the party was presenting a no confidence motion in Health Minister Joe Cassar. If Cassar falls, the government would still hold to power but it would be severely weakened. Debono could also make life for government impossible by tripping government up on normal legislation.  But Debono's space of manoeuvring remains limited as government can still delay his antics through its hold on the house business committee. 

Debono also knows that once the government falls he will be toast. But by hinting that he would form a rival Nationalist Party, he seems bent on refusing to vanish from the political scene. Even Dom Mintoff in 1998 had toyed with the idea of contesting the elections.

But the fact that he spoke of a new party on the very day when he was seeking readmission in the established party shows that Debono is still mixed up on his political future.

What is certain is that Debono has shown strength in character in standing up to an entire party, a pre-requisite for someone intent on setting up a new party in a hostile political environment.  

Debono himself seems aware of the difficulty of finding enough candidates to fill all districts let alone getting elected through an electoral system which favours the two behemoths.

But even the threat of a new rival party has failed to terrorise the PN's executive.

In fact while the prospect of a party for 'disillusioned Nationalists' may well be a blow for Gonzi's attempt to recover lost voters, it could also sap in to Labour's lead by attracting some former Nationalists who currently intend voting Labour but could be lured into voting for a 'Nationalist' like them.