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9 EDITORIAL BusinessToday is published every Thursday. The newspaper is a MediaToday publication and is distributed to all leading stationers, business and financial institutions and banks. MANAGING EDITOR: SAVIOUR BALZAN EDITOR: PAUL COCKS BusinessToday, MediaToday, Vjal ir-Rihan, San Gwann SGN9016, Malta Newsroom email: bt@mediatoday.com.mt Advertising: afarrugia@mediatoday.com.mt Telephone: 00356 21 382741 B ernard Grech has publicly ad- mitted the Nationalist Party has a debt mountain of €32 million and is losing tens of thousands every month from its media company. He posited this as an existential threat for the party and went as far as contemplating the sale of party clubs to solve the problem. Grech also hinted at decisions that may have to be taken concerning the party headquarters in Pietà and the media company owned by the PN. He has said that the financial prob- lems the PN is facing have not only conditioned how the party portrays itself and conveys its message, but at times has also conditioned the political message itself. Grech said the party had to solve its debt problems before it can become an effective tool for doing politics. Finding the solutions is not going to be easy. Leaders who came before Grech tried to cut the debt, even is- sued a private loan scheme to restruc- ture pending loans, and yet they failed despite cutting costs in the media com- pany. e PN faces financial ruin and this is a worrying predicament for democ- racy. A party that is heavily indebted and financially crippled becomes more vul- nerable to blackmail by people with deep pockets and malign thoughts. It is within this context that the words of Chamber of Commerce President Marisa Xuereb ring loud when she called on political parties to be more transparent and sustainable with their finances. e PN's massive debt did not happen overnight and is the result of years of mismanagement and grandiose dreams that saddled the party with expenses it could not afford. An act of contrition is the very least the party should show before it starts to tackle the problem. But financial problems do not only impact the PN. e Labour Party also has its own financial woes with media reports suggesting that the party's TV and radio station, ONE, has debts run- ning into €10 million. Both parties owe utility billing com- pany ARMS millions and have similar arrears with the tax authorities. Political parties are an essential part of participatory democracy and when they fail to administer their own house well it only breeds disdain and dejec- tion from voters. Admittedly, political parties have many more constraints than normal businesses when trying to raise funds to function well. ey need money to attract talent and reach out to voters but in raising that capital they also have to be careful of ethical and polit- ical pitfalls. Donations remain the primary source of income but unless these are regu- lated tightly they risk leaving the party beholden to big business. e spirit of the party financing law was already breached when the PN is- sued its private loan scheme – ċedoli – since donors remained anonymous. One solution to cut the dependence of parties on big business money is to have state financing of political parties based on their electoral performance. is will not go down well with tax- payers but if we want a healthy democ- racy, we require healthy and profes- sional political parties with no strings attached to anonymous donors or big business. But any such scheme to support po- litical parties must apply to all those who contest general elections (and sat- isfy some form of threshold criteria) and be accompanied by rigorous trans- parency rules. No public funds should go to finance the companies that belong to the par- ties and this can only be achieved by fencing off commercial operations. e financial aid must go to the politi- cal party to develop policy, and employ and train people. In this way parties can survive and democracy is safeguarded. State financing of political parties 5.5.2022

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