It’s the economy, stupid!

“It’s the economy, stupid” is a phrase rendered famous by Bill Clinton in his first presidential campaign, when his strategists correctly surmised that what would determine the outcome of the election race would be what the American people felt about the economic prospects for the immediate future.  Clinton went on to win the presidency, even though it later transpired that the economy had already been on the mend.

Could Clinton’s phrase be relevant to the impending general election race in Malta?  It seems so.

The economy has resumed its growth path, after a short recession.  Unemployment is quite low and far off the EU levels.  Maltese banks have strong balance sheets and have shrugged off the financial meltdown that threatened many of their counterparts in Europe.  Malta’s workers have not had to demonstrate against an ever-rising pension age.

Yet ... according to a recent Eurobarometer survey, the majority of Maltese are pessimistic about the coming year.  A whopping 62 per cent believe the current economic situation is bad, and a remarkable 43 per cent expect it to be worse in 12 months.  The general perception of the employment market is similarly negative.  Fully 46 per cent consider the jobs market to be bad and 26 per cent believe it will get worse.  Only 10 per cent forecast an improvement in the employment situation.

So, what is going on?  It seems that the majority of people are not buying Prime Minister Gonzi’s claim that the Nationalist Government is running the economy well.  The Eurobarometer survey shows that people are very concerned about the rising cost of living and high electricity tariffs.  No less than 86 per cent say the cost of living is high, with 62 per cent predict even worse to come.  Seven out of eight people consider the cost of energy to be unaffordable, whilst three-fifths believe things will get worse in a year’s time.

The survey finds that 63 per cent of the Maltese  consider their household finances as good.  Yet, consumers are not willing to part with their money.  In fact, the latest retail sales statistics released by Eurostat show that, in August, the volume of retail trade in Malta fell by an annual 5.4 percent, continuing the negative series of results in the last six months.  Why would Malta’s consumers, who have been bombarded by government propaganda that in Gozo they have a safe pair of hands, not consume whilst Europe’s consumers, who have been going through hell, have maintained their spending levels?

Money speaks louder than words.  The message seems to have reached the PN strategists who, in desperation, are waging a dirty war based on lies, such as that the PL would freeze the minimum wage.