Opinion: Moody’s warning for Abela

Moody’s has just rapped Robert Abela.  It’s warned him that if he keeps increasing Malta’s debt burden to retain his iron grip on power, Malta’s credit rating will be downgraded.

Moody’s gave Abela a stern telling off.  “Institutional shortcomings in the areas of anti-money laundering and combating the financing of terrorism would also be credit negative, as would the re-classification of Malta under the Financial Action Task Force’s ‘grey list’”.

Moody’s is warning Abela:  if you don’t get your act together, Malta risks being grey-listed again.

Moody’s clearly outlined what it expects from Abela:  “Moody’s expects Malta to continue to engage with the financial community to ensure a more effective enforcement of the regulatory framework, which should support the island’s financial competitiveness in a sustainable fashion”.

Translated into simple language, Moody cautions Abela that if he continues in his obstinate ways, he will wreck the economy. It admonishes him for failing to enforce the rules effectively and warns that he will destroy Malta’s financial competitiveness.

Moody’s notified Abela that he can’t continue blatantly ignoring the rule of law and brazenly defending those accused of involvement in massive financial crimes. It’s remonstrating with him for allowing Edward Scicluna, now facing criminal charges in relation to the shocking Vitals scandal, to remain Central Bank Governor.

In its short communication, Moody’s repeatedly highlighted the challenges Malta faces, including “a significant fiscal deficit due to a comprehensive policy response in terms of energy-related support measures and remaining concerns over the rule of law and control of corruption in the country”. Moody’s is concerned.

Malta’s prime minister is on a crusade to demolish the judiciary in defence of his predecessor, notorious worldwide for his seedy corruption.

Abela is intimidating the judiciary for pursuing Muscat and his two chieftains – Konrad Mizzi and Keith Schembri – who already face a US State Department ban from entering the US because of “credible evidence” of their involvement in significant corruption over the Electrogas power station.

Now that a 1218-page inquiry report has been leaked, everybody knows that Muscat and his wife Michelle refused to unlock their phones as requested by the magistrate.  It had to be US Homeland Security special agents to gain access to Muscats’ phones.

Muscat always bragged that he had nothing to hide, yet he desperately attempted to prevent the magistrate from gaining access to his phone. This is the man Abela is protecting with his hostile attack on the judiciary.

Abela knows that his defence of his predecessor jeopardises the country’s financial status.  He knows that any downgrading of Malta’s ratings will mean a massive increase in interest rates and a significantly increased drain on the government’s ability to sustain public services.

Abela has made it clear that he has absolutely no intention of changing course. He always puts his own party, his friend Joseph, and his own interests before the national interest.

That was amply evident in his reaction. He ignored all of Moody’s warnings and pretended those dire warnings about corruption and the rule of law didn’t happen.

“Another vote of confidence by Moody’s,” his social media post read. “They praise our moderate debt burden, sound institutional framework and the country’s strong trend growth (sic)… they give Malta a stable outlook because of our wealthy and fast-growing economy”.

That is only half the truth, which is worse than a lie.  What Abela didn’t tell the nation was that Moody’s clearly declared that “The a3 institutions and governance strength reflects benefits from the country’s institutional environment from EU (Aaa stable) and euro area membership”.

Malta’s financial situation is what it is because Malta is a member of the EU and in the euro area – something that Abela’s party and the very man he now shields from the long arm of the law vehemently opposed.

Abela’s Labour media, ONE News, keeps feeding the nation more lies.  “The debt to GDP ratio will remain stable,” they announced in their news item on Moody’s Malta periodic review report.  That’s a complete lie.

Moody’s report states the opposite: “The public debt ratio (is) to increase to 53.9% of GDP by 2025 from 50.4% of GDP in 2023”. That’s a massive 7% increase in the debt-to-GDP ratio in just two years.

ONE created its own fiction, distorting Moody’s report to convince the nation that this was “positive news”.  “The international experts, who don’t look at faces, insisted that the deficit is expected to fall this year and again in the following year.”

They’ve stopped bragging about surplus now.  They’re just heralding a slight reduction in deficit as some huge success while concealing the real message – that the debt-to-GDP ratio is still rising, that Labour has run up “a significant fiscal deficit” and that there are “remaining concerns over the rule of law and control of corruption in the country”.

Abela and ONE have to deceive the public about the real financial situation – because the only thing buoying Abela’s electoral prospects is the illusion of an economy that is the best in Europe, a miracle.

Abela sells the nation the lie that under Labour, the economy will keep steaming ahead, and everybody will be richer.

In truth, Moody’s warned that Malta’s debt situation and debt affordability metrics “will deteriorate as high fiscal deficits and the gradual impact of higher interest rates will more than offset the favourable effect of the country’s strong nominal growth”.

Moody’s has told Abela what he needs to do for the country’s economy to progress – cut the debt burden and sort out the corruption. But Abela put his own interests before those of the nation.

Abela must keep borrowing money to buy off voters with cheques and payoffs exploding the public debt burden with catastrophic consequences for the nation’s prospects. And he has to defend the corrupt Joseph Muscat.

Abela not only ignores Moody’s advice but pretends he never got it – and that instead of the stern reprimand received, he says Moody’s gave him “a vote of confidence”.