Guest post: Joseph Muscat saved his skin with 88 million euros of other people’s money

By Matthew S:

Some big news swept over Malta in the last couple of weeks but nobody seems to have noticed. The power station project has been declared a failure before it even got off the ground.

Here is the proof. Electrogas Malta Ltd, which is supposed to be building Joseph’s new power station and running it, couldn’t raise the investment cash to get it off the ground. Not even the State Oil Company of Azerbaijan, which is a shareholder in the company and which fritters away millions on public relations for the Azerbaijani dictatorship, bothered to put in the money to get the project going.

Not only has Electrogas been unable to raise investment, but it hasn’t been able to persuade a single bank to loan it the money. Until the Bank of Valletta, with its government-appointed chairman (John Cassar White) and its government shareholding was strong-armed into loaning the company 100 million euros while the government itself stood as guarantor for that loan to the tune of 88 million euros of public money.

This is completely unheard of. What it means is that if Electrogas defaults on its loan, the government of Malta will pay this private company’s debt to the bank up to 88 million euros, using public funds.

Maltese people will have paid 88 million euros in taxes to save the skins of Electrogas Malta’s shareholders.

There is only one reason why Joseph Muscat and his cabinet have taken the decision to do something so crazy and irresponsible. Without the government’s unprecedented guarantee, there would be no bank loan for Electrogas. Without the bank loan, there will be no power station. And without the power station, there will be no Labour government, and most particularly, no Joseph Muscat as prime minister.

The most salient point of this story is not the amount of money put on the tablefor Electrogas Malta — though that is indeed astronomical — but the fact that all potential investors, including Electrogas shareholders themselves, have figured that the project is too risky to put that much money into. In other words, they have concluded, no doubt after a thorough analysis, that the project is doomed to fail.

The analysts will have concluded that the companies involved are not trustworthy because of poor project records and bad finances, Gasol – which had to be de-listed even from the Alternative Investment Market of the London Stock Exchange, and whose last published accounts before that were utterly disastrous – being a quite obvious problem. And the analysts will also have concluded that the project is simply unfeasible and nonsensical, the folly of somebody with too much power and not enough sense.

But where everyone else fears to tread, in come Joseph Muscat and his Spouse, he clutching a 44-million-euro-stuffed minaudiere branded with the eight-pointed cross, and she carrying another 44 million euros crammed into a handbag emblazoned with the legend MICHELLE. That’s a cool 88 million euros of our taxes, thank you very much.

This is insanely irresponsible behaviour. The Opposition really needs to take this seriously and start asking all sorts of questions. This is incomparably bigger than Café Premier, Żonqor Point and Marco Gaffarena combined, because our 88 million euros of our money is being put on the line just to save the skins of Joseph Muscat and Konrad Mizzi.

Maybe the Opposition has been slow to take this one up because, at a pace of two scandals a week, it is hard to keep up, but keep up we all must.

The Prime Minister is risking 88 million euros on an expensive, dangerous and unworkable project just to build a monument to his massive ego. It is reminiscent of the pharaohs of ancient Egypt who hubristically built grand new cities in the desert which would eventually be left to rot and be covered in sand.

More than that, the guarantee given to Electrogas is an indictment of Labour and Socialist politics. The reason why you should never vote Labour is not only because they are terribly corrupt but also because, even on their best-behaved and most transparent days, they still don’t understand the most basic of economic concepts.

Spain and the profligate Zapatero administration, France and the disastrous Hollande presidency, Greece and the shamelessly reckless Syriza-led government – socialists are always bad news, wherever they are elected, because they behave as if money grows on trees. Thank goodness for Britain who told Red Ed Miliband right where to stuff his left-wing policies.

As Margaret Thatcher once said, the problem with Socialism is that you eventually run out of other people’s money.

There are only three types of people who vote Socialist: the ill-educated who don’t really understand the central issues, hipster middle-class people who love iconoclasm and still think that Che Guevara is the ultimate hero, and weird, leftist academics who live in a world of their own. Don’t be one of these. Please lobby your Opposition MP to stand up to this madness.

If you need any proof of how dire things can get when a Socialist administration is allowed to run riot with other people’s money, just have a think about Greece. The country is bankrupt and on the verge of total collapse. Worse than that, its extreme Socialist government refuses to carry out any significant reforms.

Please act now before it is too late. Once the levee breaks, there’s no turning back.