[ANALYSIS] After Panama: From paralysis to overconfidence

The Labour party – The risk of paralysis

Unlike previous scandals, the Panama affair has hit the core of Muscat’s government, dragging down with it not only Konrad Mizzi at the very moment when he was anointed deputy leader by 96% of party conference delegates, but also Keith Schembri, the Prime Minister’s own chief of staff.

Previous scandals, such as the one involving Marco Gaffarena, led to the resignation of junior minister Michael Falzon who was himself a rival to Muscat in the 2008 leadership contest. 

So far the electorate has blamed bad governance on errant ministers, while Muscat was seen as the saving grace for the party. But this scandal is too close to home for Muscat.

For the first time Muscat has been gridlocked.  While previously he did not hesitate to fire Anglu Farrugia, Emanuel Mallia and Michael Falzon, he is incapable of doing the same to Konrad Mizzi and Keith Schembri, for the simple reason that by doing so he would be further undermining his own hold on power.

Moreover, Mizzi himself has declared in an interview that he had informed Muscat of his fiscal arrangements in Panama and New Zealand three weeks before the scandal erupted in the public arena, while also admitting that it was the PM’s chief of staff who suggested to him to set up his trust.

In this sense the scandal that struck while Labour was electing Mizzi as Muscat’s second in command, has paralysed the government’s central nervous system rather than hitting some gangrenous organ of party or government. 

The online fightback: while Labour advances with a poster campaign focusing on former ministers from the Gonzi administration inside Simon Busuttil’s parliamentary group, each with their own tainted records, the Nationalists have swiftly responded by matching up Joseph Muscat with Marco Gaffarena, whose €1.65 million compensation for an irregular expropriation cost Michael Falzon his Cabinet seat, and Azerbaijani president Ilham Aliyev, whose state-owned SOCAR will supply Malta with gas.

The scandal and the damage done

But how far will this scandal damage the Labour party? Surveys held so far before the Panama dealings show Labour losing a third of switchers to the PN and a tenth of traditional voters to abstention.

Logic dictated that with Muscat enjoying an eight-point trust lead over Busuttil, it would not have been difficult for Muscat during an electoral campaign to recover a large part of disgruntled Labour voters. This pointed towards another victory, albeit with a reduced but still sizeable margin. Still, will Muscat be able to win back disgruntled Labourites now that he has lost his sheen?  

The scandal may have robbed Muscat of his greatest strength: his invulnerability.   The very risk of losing the next election may in itself reinforce entrenchment and encourage ministers fighting for the survival of their government to dish out favours to disgruntled Labourites. 

While the power of incumbency may yet win Labour votes, the party may find itself embroiled in yet more scandals, which may end up being exposed by the media before the election. For while till now Labour could turn back some of the most unreasonable requests, in the comfort of the wide gap between the parties, it may now start treating each single vote as vital in its bid to retain power.  

The silver lining for Labour is that the very prospect of a PN victory may trigger a perverse tribal mechanism through which its supporters close ranks. But Labour also includes a growing category of discerning voters who may be only weakly attached to these loyalties. They may also be keen on punishing Labour for wasting a historical opportunity to change the way the country is governed.  Some Labour supporters and officials may even be feeling disappointed that years of hard work are being put at risk by the behaviour of a few trusted individuals who lacked sound political judgement. 

While most of its core voters will probably vote Labour again, to keep the Nationalists out, they will do so with subdued enthusiasm, something that voters will see through. Others may feel obliged to support Labour for the sake of safeguarding a number of progressive reforms enacted by the Muscat government, such as civil unions, but some may feel that bad governance and neoliberal choices have outweighed these. But Muscat’s sudden endorsement of gay marriage, right at the height of the Panama scandal, sounds cynical and a cheap way to exorcise scandal by using the civil liberties trump card.

Facing the negative with the positive

Faced with the PN’s onslaught on corruption, the PL’s best response may well be that of harping on the positive achievements of the government in areas like social policy, the economy, education and civil liberties.  Clearly this was the message the PM wanted to convey in Gozo on Sunday. The problem for Muscat is that whenever Konrad Mizzi appears alongside him, people will think about Panama.  Mizzi has now become an albatross around the PM's neck.

Labour may also bid to rehabilitate Mizzi’s name by heralding the opening of the new gas-fired power station. Yet this will also raise questions on the role of SOCAR, a company tied to one of the most corrupt regimes in the world. The PL is likely to harp on its positives while pressing the point that the Opposition may put these achievements in danger.  The PL may also raise the spectre of the PN reversing social reforms, such as civil liberties, recalling Busuttil’s abstention in the civil unions vote.

It may also present the PN as a threat to economic stability, something which the PN effectively did with regard to Labour when it was in government. Still, this may be more difficult for Labour because economic stability was widely seen as the strongest point of the embattled Gonzi administration.  

It is also very likely that the PL will avoid needless confrontation with civil society on environmental issues in the next two years, to avoid creating new pockets of dissent beyond the Zonqor point case, while at the same using the regressive planning policies approved in the past two years as bait to keep developers in line.  

Yet some Labourites may feel bitter seeing that the recklessness of two persons in high level positions have endangered the future of the entire government, and this may make them unforgiving. Still, it remains unclear whether internal opposition may erupt in a party which has now been shaped in Muscat’s own image. The ultimate consequence of this may be an accumulation of bad blood and unease, which may paralyse the Labour Party. In its absence, it will be the government machine and Muscat in his ‘presidential’ role who will fight tooth and nail to win the next election. 

Nationalist party – The risk of over-confidence

By default the Nationalist Party has been given a new lease of life by the Panama scandal. Although recent surveys have shown a slow recovery, it was clear that the eight-point trust gap between the two political leaders in the polls weakened the party’s chances of winning. At best the PN was hoping for a narrower gap. 

But while renewed confidence in victory may galvanise supporters and donors and set the momentum for the next election, it may trigger the kind of over-confidence which may be counter productive to the party’s rehabilitation from the 2013 drubbing. In this sense, Labour’s implosion may trigger an amnesia in the PN’s leadership about the reasons which led the electorate to thrash the PN in the 2013 elections. It may also result in a self-righteous mode which could further alienate switchers who hate being told how wrong they were in 2013. 

A protest too far?

Initially the response of party leader Simon Busuttil to the Panama scandal was  somewhat disappointing. After giving Muscat a 24-hour ultimatum, many expected decisive action in parliament through the presentation of a motion of censure in Konrad Mizzi and Keith Schembri.  Moreover his claim that anyone not attending the protest would be giving tacit approval to government may have irked middle of the road voters.

Instead, the PN leader announced a national protest against corruption, an announcement that came as an anti-climax for those expecting a parliamentary showdown. Moreover Busuttil, who normally shows his best when speaking in parliament,  opted for a show of force in the streets where he normally lacks the sense of gravitas associated with Fenech Adami’s appeal to the grass roots in the turbulent 1980s.  Yet the protest gamble has paid off.   He managed to throw the spot light on himself and he performed well. Busuttil expressed a sense of national indignation, showing conviction and no signs of cockiness.  Surely he has made the best of a negative moment for Muscat. But will it last?

How to win an impossible election

Surveys show that the PN needs three things to win the next election; 1) recover most switchers who shifted from the PN to the PL in 2013; 2) retain the absolute majority of its 2013 vote base and galvanise their enthusiasm to carry the party’s message; and 3) bank on abstention of a significant number of Labour voters.  

Sunday’s national protest against corruption  mostly helped the party achieve the second aim, but the climate of retrenchment may actually be counter-productive to attracting switchers and keeping Labour voters away from the polling booths. Ironically, the prospect of the PN becoming electable again may reinforce tribal loyalty among PL supporters who so far felt comfortable in the knowledge that the PN had no chance of winning and were banking on a reduced gap as a way to quell Muscat’s arrogance. The greatest enemy the PN faces is its own recent history in government, where good governance was lacking.

The PN’s trust deficit

Moreover, the party has not found a way to deal with the, “How much I wish this government to fall, but am scared of the prospect of the opposition governing” syndrome (a feeling expressed in the ‘Brikkuni’ 2012 song ‘Nixtieq’) among floating voters and disgruntled Labour voters.  

The only way for the PN to address scepticism is through binding commitments. The recently published proposals on good governance, some of which would represent a big quantum leap in the country’s administration, were a step in this direction.   

But ultimately it will boil down to whether Busuttil will manage to project himself to the wider electorate, particularly to those who will never identify completely with the Nationalist Party, as a leader who can be trusted with the keys of Castille. For while some middle-of-the-road voters may come to see the PN as the “lesser evil” they may also need rock solid reassurances on issues such as civil liberties and secularisation.  

The lesser of two evils?

The biggest problem for the PN is that since good governance is the greatest shortcoming of this government, the choice for the electorate amounts to one between lesser evils.

The electorate will still need a yardstick by which it can measure which party is worse. Since good governance was also a major issue before 2013, to win on this front the PN needs to convince voters that it has changed in a very short span of time.

Surely the PN has little choice in making corruption its main issue, but protesting against corruption may not be the most effective way to convince sceptics who shudder at the presence of now notorious former ministers in such events. Still absent is a humble apology; a strong statement by the party leader, condemning the antics of past PN governments. Perhaps what switchers need is recognition by the party that they were right in changing government in 2013 and that the party has now listened to them.

The prospect of the party being in government again may also expose the leadership to new pressures from big business and donors, which may demand stability, which is good, but also continuity in neoliberal policies, which the PN has been awkwardly confronting in opposition.

Although trust in Muscat is being constantly eroded by scandals, Busuttil cannot bank on winning by default. Fenech Adami’s gravitas and ability to say the right things at the right moment was the party’s greatest asset in the 1980s, when the party managed to widen its appeal beyond the traditional elites.

Busuttil has often hown an opposite tendency, to say the wrong things at the wrong moment. A slick party machine, an effective team of advisers and an ability to charm sceptics are what is lacking at the PN. Yet Busuttil’s firm belief that Labour’s mask was bound to fall one day, exposing its true ugly face (a view he has expressed in private since he was elected) may have been vindicated and his perseverance in holding the government to account may well be his strongest asset.  It was the sense of conviction which he conveyed to the nation on Sunday which may give him a sense of gravitas which he lacked in his first two years as opposition leader.

The greens in the wilderness

With the PN still reeling from the 2013 drubbing and Labour paralysed by scandals, Alternattiva Demokratika should be having a field day. The fact that it has been slumping in the polls despite a series of scandals and widespread disillusion with the government, and a lack of trust in the opposition, is also revealing.

In reality, the problem with the greens is a generational one. For after the party struck a chord before the 2013 election, the resignation of dynamic Michael Briguglio immediately after the election left a gap. Moreover, the party faces competition from Muscat’s Labour on civil rights issues and from Simon Busuttil’s PN on good governance issues, while civil society movements have taken up environmental issues.

Moreover it remains doubtful whether disgruntlement among Labour voters may ever result in defections to AD. And faced with constant scandals involving this government, some AD supporters – especially former PN voters – may once again come to perceive the PN as the “lesser evil”, and thus return to the fold.

In this sense AD faces a quandary: if it does not distance itself from the PN it risks alienating any potential defections from Labour, while by condemning the PN’s hypocrisy it risks further alienating its voting base in PN-leaning districts and localities such as Attard and Sliema.

The retrenchment of partisan allegiances after Panama may well further penalise AD, especially if the next election is increasingly perceived as a ‘do or die’ election by voters.  Still, for AD there could still be a pool of disenchanted voters who trust neither of the two major parties, but these may include many who do not support Green and progressive policies and may even include reactionaries recoiling at the betrayal of socially conservative values by the political mainstream.

These voters – presently spread across the political spectrum – may also need to be factored in future political considerations. For by tainting a social liberal agenda with cronyism, after first proposing and than aborting the push back of migrants, Muscat’s Labour may well have fertilised the ground where a conservative right wing may anchor its roots.