The honeymoon is over

The honeymoon is over and the piper wants to be paid.

The squeeze is coming from every direction as the course charted by self-professed economist Joseph Muscat runs aground on the shoals everyone knew were waiting ahead in the fog.

There are two patterns to keep an eye on. One is the asset stripping of government entities to turn a quick buck. The other is the way the disgraced former prime minister kept it all going by placing party loyalists and spineless yes-men in key ministries, government entities and regulatory bodies.

Payment was deferred, but the bill collectors are finally at the door and the taxpayer is about to be kneecapped.

Enemalta is the latest gutted government entity to make headlines for hiding shocking financial losses, in this case tens of millions of euros since 2020.

The situation can’t go on much longer but the outcome is anyone’s guess because the government no longer owns the national energy provider. Mizzi sold 33% of it to the People’s Republic of China for a paltry €200 million, and threw in one of its last remaining assets, the BWSC power plant, for an extra €120 million.

It was a ‘no brainer’ deal for China, which is also being paid a fixed “consultancy fee” of €2 million per year.

China puts up €300m to “acquire 1/3 of a government owned utility company.
Government pays Chinese shareholder a fixed “consultancy fee” worth millions per year.
Government also covers losses.

That’s a €300m perpetual loan by China not an “investment”.https://t.co/iLIcJSOIej

— BugM (@bugdavem) April 26, 2022

Where is it coming from? The taxpayer, of course. The loss of Malta’s strategically-important energy provider will be yet another casualty of accepting easy money on Xi Jinping’s Belt and Road.

All they can do in the meantime is keep hiding the losses by illegally refusing to publish annual financial statements.

Air Malta hasn’t published its accounts since 2018 either — the year Konrad Mizzi sold its take-off and landing slots to a new made-up entity called Malta Air Travel Limited, which leases their use back to the bankrupt national airline just as Air Malta leases all its planes.

This financial chicanery boosted the books, allowing Mizzi to claim yet another success by moving numbers from one column to another, and it allowed for a sneaky injection of taxpayer funds. But like everything he touched, it was always smoke and mirrors.

Air Malta can safely go under when the EU says ‘no’ to yet another State aid package, and the government can sell those slots to someone else.

The same thing happened with the VGH / Steward Healthcare deal, too. Public assets were stripped and sold and the taxpayer has continued to fund operations while someone else reaps the rewards.

A responsible government would follow the money and try to get some of it back. Who bought these national assets at fire-sale prices? Who facilitated the deals, and why? How much did they get for selling you out, and where did they hide it?

As my high school accounting teacher used to say, the odds of a genuine investigation happening in Malta are slim to none. Not while the police and every investigative and regulatory body is run by loyalists whose chief qualification is looking the other way. The pattern was set under Peter Grech, Ian Abdilla and Lawrence Cutajar, and little has changed.

That brings me to the second pattern. Muscat’s dodgy deals were enabled by complicit parasites whose support was bought with a deluge of direct orders and ‘person of trust’ appointments.

Unfortunately, these were never one-off payments, and thanks to global inflation, a looming recession and a staggering level of national debt, the government can no longer afford to honour the cheques Joseph Muscat wrote.

Look for a lot of “getting off the grey list” type talk about responsible governance and prudent finance.

Finance Minister Clyde Caruana said a cost-cutting exercise is already underway in hopes of reducing the massive government deficit.

Mario Cutajar, Principal Permanent Secretary of Malta’s civil service, is looking for “waste” to shed, too. “Cost-cutting could impact the public service in many ways,” he said. “It could impact employment and work processes. But there must most definitely be cost-cutting where there is waste.”

I suggest he start with his own bloated salary. He can also ‘lead from the front’ by giving up his ‘extra’ €20,000 appointment as director of Heritage Malta. Surely he can spare the cash.

Even Prime Minister Abela has promised to ‘revise’ the outrageous pay packages that were given to Party loyalists to head a laundry list of agencies and government entities. It’s the perfect time to do it since politically-appointed CEOs resign and must be reappointed after a change in government.

But politicians promise a lot of things in the lead up to an election. It’s difficult to see how the prime minister can rein them in and stop the wholesale looting of the State when everyone has so much dirt on everyone else. Angering the wrong insider could spark a cascade of bitter recriminations.

Would cutting Carmen Ciantar’s massive €163,000 pay package break the uneasy alliance between former leadership hopeful Chris Fearne and Muscat’s continuity prime minister?

What sort of assurances were given to Kurt Farrugia, the man who knows exactly what happened on Muscat, Mizzi and Keith Schembri’s secret trip to Azerbaijan?

What do they owe to Edward Scicluna, the spineless yes-man who sold what remained of his integrity to Muscat in exchange for a title and a very generous pay package?

Muscat’s enablers can’t be fired no matter how badly strained the public finances become. The collateral damage would be too great.

The only choice is to stall for time, sticking the average powerless taxpayer with the bill and hoping it’ll all blow over.

Unfortunately, these ill winds are now perpetual and it’s only a matter of time before they blow the house down.