The fallout from last year's Panama papers leak could spell the end of Joseph Muscat's premiershipby Charlie Askew / June 1, 2017 / Leave a comment
The most interesting election in Europe is about to take place—and it’s not in the UK.
A snap election has been called in Malta on June 3—a year ahead of schedule—following sensational corruption allegations against the Labour Prime Minister Joseph Muscat.
The once wildly popular government is tottering, following a series of scandals prompted by the Panama leaks almost exactly a year ago.
Even so, in contrast to other European elections, no extremists stand to gain control. Instead, in this fervent democracy—which has one of the highest voter turnout rates in Europe—the choice is as it has always been in the 50 years since independence from Britain: the Partit Laburista (Labour) on the centre-left, and the Partit Nazzjonalista (Nationalists) on the centre-right.
But the corruption allegations have set the tone for a campaign of bitter, internecine warfare.
Politics in Malta may be many things – parochial, patriarchal, patronage-based – but it is never boring.
The scandal includes investigations into massive alleged corruption among the family and close associates of Muscat and lurid claims by a Russian whistleblower of huge wealth transfers from Azerbaijan to off-shore shell accounts.
With the Opposition leader publicly arriving at the Magistrate’s office with 8 files of evidence, these events have been an all-consuming backdrop to the election campaign.
The allegations mark a difficult, and disappointing, turn for a government once entrusted with high levels of hope.
That hope stemmed from the unprecedented Labour result of the 2013 election. For years, voluntary turnout has been astonishingly high in Malta— always above 90%—and most elections have been decided by just a few percentage points. For almost a quarter of a century, up until 2013, narrow victories went to the Nationalists, allowing them to hold a slim but workable majority in the Maltese parliament.
2013 turned history on its head. In a grand surprise, the Maltese Labour Party won with the landslide margin of 55%-44%, the biggest since Maltese independence in 1964—giving then an overwhelming popular mandate, driven by the hopes of the Maltese for change.
The Maltese New Labour
The reasons for their success were simple. Labour had reformed under their then new leader, Joseph Muscat. As a dynamic young leader reformed a staid working-class institution and injected an enthusiasm for the middle class, wealth creation and Europe, they looked remarkably like Britain’s New Labour.
The start of Labour’s term looked similar to that of New Labour, too: Malta’s economy grew, wealth inequality dropped and polls boomed. With the next election due in 2018, Muscat looked on course for another landslide, just as Blair once did.
Things look different now. While the 2013 election featured youthful optimism, the run-up to this one is accompanied by allegations of sleaze, Trumpian claims of fake news and, in the Prime Minister’s words, “wild allegations.”
The Panama scandal hit Malta harder than most countries. The leaks revealed that both the Prime Minister’s Chief of Staff and a close political ally, the Minister of Energy, had been involved with off-shore shell companies designed to conceal transfers of wealth. Muscat dithered in removing the accused, revealing a streak of loyalty and, possibly, political weakness. The Maltese press went wild and the Opposition smelt blood.
Now, one of Malta’s most active bloggers, Daphne Caruana Galizia, has used revelations from the Panama Papers to accuse the Prime Minister himself of being the end benefactor of another shell company, Egrant, citing evidence from a disgruntled Russian employee of the Pilatus bank that supposedly handled his affairs.
Social and mainstream media alike are ablaze. Conspiracy theories abound, including that papers were stored in a room with no CCTV, and that the Maltese Police have failed to investigate.
Three Maltese NGOs have recently suggested that independent branches of state— the judiciary and civil service in particular— are being co-opted into party machinery. A TV crew captured the Chairman and Risk Manager of Pilatus leaving the bank, at night, via an emergency exit with luggage, at the height of the allegations. (He later said the bank had subsequently released nine hours of footage in an effort to clear up what occurred.) Something here smells rotten, though only the inquiry may discover its true extent.
Even against this backdrop, polls still indicate Muscat will win. Labour has delivered in the last 4 years, while the Nationalists are yet to re-find themselves as a political force. Their leader, Simon Bussutil, has focussed heavily on the allegations, but the investigation will not conclude before the election and the Nationalist manifesto looks slim in comparison to Labour’s confident policies.
An intensely partisan politics
Maltese politics is intensely partisan, and the election will be won on the back of a thin sliver of Maltese voters willing to vote outside their party background, on who they trust, and who they believe can deliver.
The intense interest in this election will ensure that turnout remains high, but more and more Maltese are growing disillusioned with their country’s politics. The allegations and counter-allegations that have marked this election, the obsession with corruption and division, the patronage that underpins the system, all point towards a system that threatens to alienate its citizens.
Whatever the official inquiry concludes, the greatest worry in this fascinating election is that it may mark the point when the precious gift of such an active, vibrant, partisan politics starts to turn bitter.