Malta’s Labour Wins First Election Since Euro Start

Malta’s Labour Party Leader Joseph Muscat
Malta’s Labour Party leader Joseph Muscat is greeted by supporters as he arrives to cast his vote at a polling station in Valletta, Malta during national elections. Photographer: Matthew Mirabelli/AFP via Getty Images

Malta election first-count results confirm early projections showing Malta’s Labour Party won the vote for the first time since the euro’s start as voters rejected the ruling Nationalist Party even after it helped shield the nation from Europe’s debt crisis.

Labour, led by 39-year-old former journalist Joseph Muscat, claimed 55 percent of the vote, 11 percentage points more than the Nationalists, according to results released tonight.

The margin of victory is the biggest since at least 1964 and initially suggests the Labour Party may have a parliamentary majority of 9 seats out of a minimum of 65, the largest any Maltese government has held since before independence from Great Britain in 1964.

Nationalist Party Secretary-General Paul Borg Olivier, whose party has governed for all but two of the past 25 years, conceded defeat on state-run Malta television. Voting took place yesterday, with turnout of 93.1 percent, down from 93.3 percent at the last general elections in 2008.

‘Humbled’ by Victory

“Our aim is to show there is a new way of doing things,” Prime Minister-elect Muscat said on Malta television, adding that he’s “humbled” by the victory and thanking outgoing Prime Minister Lawrence Gonzi. Muscat will be sworn in tomorrow and is due to join his European Union counterparts at a Brussels meeting on March 14.

“We are as European as we are Maltese,” Muscat said in an interview in Floriana after he addressed Labour party supporters this afternoon. “We want to assure everybody that we are a new, progressive voice around the European table,” he said.

The Labour Party will be “diligent but will safeguard Malta’s national interest,” while working with European partners to “rebuild a solid Europe which will protect its citizens from further effects of a crisis that has brought poverty and strife to many across the continent,” Muscat said.

His Labour Party, which last held national power in 1998, benefited from public anger over rising power prices, an unpopular overhaul of the public transport system and a corruption scandal involving oil procurement.

EU Efforts

Gonzi’s Nationalist Party, which steered the country into the EU in 2004 and to euro adoption in 2008, 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 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, less than the EU average of 93 percent.

Muscat’s calling for a “new beginning,” 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.

S&P Reaction

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 yesterday’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 were more than 332,000 eligible voters out of a population of just over 416,000, up from the 315,000 eligible voters in 2008.

European Commission President Jose Manuel Barroso congratulated Muscat on the Labour Party’s victory in an e-mailed statement promising the “continued commitment of the European Commission to work side by side with Malta and to overcome the challenges” faced by the union.

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