March 9 (Bloomberg) -- Malta’s Labour Party may win national elections for the first time since the start of the euro as voters reject the Nationalist Party that has dominated politics and shielded the country from Europe’s debt crisis.
Voting begins at 7 a.m. and ends at 10 p.m., with initial projections due to be released tomorrow morning.
Labour, led by 39-year-old former journalist, Joseph Muscat, had a lead of more than 10 percentage points over the Nationalists, who have governed for all but two of the past 25 years, according to final opinion polls. Muscat is benefiting from public anger over rising power prices, an unpopular overhaul of the public transport system and a corruption scandal involving oil-procurement.
Prime Minister Lawrence Gonzi’s Nationalist Party, which steered the country into the European Union in 2004 and to euro adoption in 2008, has helped protect the euro-area’s smallest economy from the debt crisis that led Mediterranean neighbors such as Greece, Cyprus and Spain to seek bailouts.
Under Gonzi, economic growth has outpaced the euro-region average and the budget deficit has fallen to within the EU’s limit of 3 percent of gross domestic product. The jobless rate of 6.5 percent last year was the fifth-lowest of the 17 countries using the euro. Malta’s debt rose to 73 percent of GDP last year, still that’s shy of the EU average of 93 percent.
Muscat’s Labour Party is calling for a “new beginning,” promising to make the island nation the best in the EU, according to his campaign platform. He says Labour is committed to controlling government spending and will further reduce the deficit. He has pledged to fight corruption, cut energy costs and lower income tax rates if elected.
The Nationalists won the 2008 elections by just 1 percentage point, resulting in a parliamentary majority of a single seat. Gonzi was forced to call tomorrow’s election after one of his allies, Franco Debono, voted with the opposition in December to reject the 2013 budget.
Standard & Poor’s reacted on Jan. 16 to the budget impasse by cutting Malta’s rating one level to BBB+. S&P said the delay in approving the budget “raises questions about the government’s ability to restore the fiscal flexibility it has gradually lost, and resolving the recurrent budgetary risks caused by loss-making state-owned enterprises.”
S&P maintained a stable outlook on Malta, citing the country’s “relative resilience to the ongoing political, financial, and monetary challenges in the euro zone.”
Malta tends to have the highest voter turnout in the region, with more than 90 percent of eligible voters participating in every general election since 1971. There are more than 332,000 eligible voters out of a population of just over 416,000, up from the 315,000 eligible voters in 2008. In 2008 voter turnout was more than 93 percent.
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