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O 141514Z MAR 08
FM AMEMBASSY VALLETTA
TO RUCNMEM/EU MEMBER STATES COLLECTIVE IMMEDIATE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 1431

C O N F I D E N T I A L SECTION 01 OF 03 VALLETTA 000101 
 
SIPDIS 
 
NOFORN 
SIPDIS 
 
DEPARTMENT FOR EUR/WE 
 
E.O. 12958: DECL: 03/14/2018 
TAGS: PGOV PREL MT
SUBJECT: MALTA'S RESHUFFLED CABINET INCLUDES NEW FM 
FRIENDLY TO USG 
 
REF: VALLETTA 97 
 
Classified By: PolOff MCummings for reasons 1.4 (b) and (d) 
 
¶1. (C) Summary: On March 12, newly re-elected Prime Minister 
Gonzi announced his new cabinet.  The new cabinet 
consolidates twelve ministries into eight, with the aim being 
a leaner and more efficient government. Of particular 
interest to the US is the fact that the new Foreign Minister 
is Tonio Borg, with him we worked very closely and 
effectively in his prior role as Minister for Justice and 
Home Affairs.  End summary. 
 
CLEANING THE DECKS 
 
¶2. (SBU) Making good on a campaign pledge, Prime Minister 
Gonzi announced a smaller and reshuffled cabinet on March 12. 
 Gonzi had promised to bring new faces into the Government, 
and the electorate ensured he delivered on that promise, 
since three former ministers were not reelected ) Foreign 
Minister Michael Frendo, Education Minister Louis Galea and 
Competitiveness and Communications Minister Censu Galea.  By 
consolidating several ministries, Gonzi's new cabinet is 
"meaner and leaner" (to quote the Times of Malta). There were 
six former ministers and parliamentary secretaries that were 
not appointed in the new government, with Gonzi opting to 
insert new faces and promote junior ministers, like Tonio 
Fenech at the Finance Ministry, as full ministers.  In the 
reshuffling, only Giovanna Debono, the Minister for Gozo, 
remained in the same post.  Of particular interest to the US, 
Deputy Prime Minister Tonio Borg, who was the Minister of 
Justice and Home Affairs (MJHA), is now Foreign Minister. 
 
¶3. (C) Corruption charges played a major role in the campaign 
and to prevent any stain on his new government, Gonzi opted 
not to appoint certain otherwise popular MPs to ministries. 
For example Jesmond Mugliett, former Minister for Urban 
Development and Roads, had been accused of funneling business 
to a construction firm he had set up.  Another backbencher 
MP, Jeffrey Pullicino Orlando, was involved in a land deal 
that is currently under investigation. Neither was offered a 
ministry.  Due to allegations of mishandling of permits by 
the planning authority, Gonzi opted to add the Malta 
Environment and Planning Authority (MEPA) to his own 
portfolio -- also a campaign pledge. 
 
FOREIGN MINISTER: TONIO BORG 
 
¶4. (SBU) The appointment of Tonio Borg as Malta,s new 
Foreign Minister was welcome news; post has cultivated a 
positive working relationship with Borg, who also serves as 
the deputy Prime Minister and leader of the House of 
Representatives.  At MJHA, the Embassy worked with Borg on a 
number of issues including Malta,s potential entry into the 
Visa Waiver Program, as well as Refugee Resettlement Program, 
and the implementation of the USG-funded PISCES Program. 
 
¶5. (SBU) During his tenure at MJHA, Borg was under domestic 
and international pressure due to an influx of irregular 
migrants to Malta.  Borg lobbied for the establishment of a 
burden-sharing process among EU members to provide some 
relief for Malta in managing what it feels to be a 
disproportionate share of the migrant population.  While that 
initiative garnered a lukewarm response, Borg was more 
successful in his lobbying for additional Frontex patrols in 
the central Mediterranean to curb the flow of migrants. 
 
¶6. (SBU) Borg has a fondness for the United States.  In 1988, 
before he was elected to Parliament, Borg participated in an 
International Visitors Program (IVP) on the US Presidential 
Elections; to this day, he closely follows US presidential 
politics.  Prior to his term at MJHA which began in 2003, 
Borg was a practicing lawyer, specializing in human rights 
cases.  Borg was first elected to parliament in 1992 and has 
been continuously elected ever since; in the recent 
elections, Borg was actually one of six MPs to be elected in 
two districts. 
 
MINISTER OF FINANCE: TONIO FENECH 
 
¶7. (SBU) While it was not a surprise, Tonio Fenech,s 
promotion to Minister of Finance, Economy and Investment is 
very welcome news.  Fenech previously served as Junior 
Minister or Parliamentary Secretary at Finance, where he has 
overseen talks between the US and Malta on a bilateral Double 
Taxation Agreement (DTA).  The US Department of Treasury 
recently announced it had entered into formal negotiations 
with Malta on a DTA, which will commence on March 24.  With 
 
VALLETTA 00000101  002 OF 003 
 
 
the same team in place representing Malta, it is likely that 
the US will be able to initial an agreement following the 
upcoming negotiations.  As head of the newly consolidated 
Ministry of Finance, Economy and Investment, Fenech has 
greatly broadened responsibilities.  The new Ministry will 
manage the budget office, treasury, Inland Revenue, customs, 
financial regulations, investment promotion and Malta 
Enterprise. 
 
¶8. (U) As Parliamentary Secretary for Finance, Fenech is 
credited with the success of bringing Malta in line with the 
economic and fiscal criteria to adopt the euro as its 
currency, and ensuring that a smooth transition to the euro. 
Fenech also ensured that Malta received 855 million euros 
from the EU for a variety of infrastructure and road projects 
from 2007-2013. 
 
¶9. (SBU) With such visible successes, Fenech is seen as a 
rising star in the Nationalist Party, perhaps even a future 
Prime Minister.  Fenech is an accountant by profession and 
former mayor of Birkirkara, Malta,s largest municipality. 
Fenech entered Parliament in 2003, and is an extremely 
popular politician who was elected in two districts.  The 
Embassy has cultivated a strong working relationship with 
Fenech, who went on an IVP focused on immigration policy and 
environmental and alternative energy initiatives. 
 
MINISTER FOR JUSTICE AND HOME AFFAIRS: CARMELO MIFSUD BONNICI 
 
¶10. (C) The new Minister for Justice and Home Affairs (MJHA) 
Carmelo Mifsud Bonnici is more of an unknown.  Since 2003, 
Mifsud Bonnici has served as the Parliamentary Secretary at 
MJHA. He was first elected to Parliament in 1998.  Prior to 
his term at MJHA, Mifsud Bonnici was a practicing lawyer, who 
handled criminal, civil and commercial cases. The embassy's 
infrequent contacts with him at MJHA left the impression that 
he was not especially competent or engaged and unaware of 
most issues on which the Embassy worked with MJHA, though 
that may have been partially a function of the job he was in. 
 
ROUNDING OUT THE CABINET 
 
¶11. (SBU) Austin Gatt, previously the Minister for 
Investment, Industry and Information Technology (MIIIT), will 
lead the new Ministry for Communications and Projects.  This 
is a consolidation of the Ministry of Competitiveness and 
Communications and MIIIT.  Gatt will retain responsibility 
for the large state owned utilities Enemalta Corporation, and 
the Water Services Corporation, as well as the Malta Maritime 
Authority, Malta Freeport Corporation and Malta Shipyards. 
During his tenure at MIIIT, Gatt closed a deal with Dubai 
Holdings to develop SmartCity Malta, based on the model of 
Dubai,s Internet and Media City; the project is expected to 
generate over 5,600 jobs in the ICT sector and represents the 
largest real estate development on the island at about USD 
300 million.  Gatt is sharp and ambitious, a minister we can 
do business with (despite an abrasive streak that rankles 
with some European ambassadors, we find his frankness and 
straightforwardness refreshing.) 
 
¶12. (U) George Pullicino as the new Minister for Resources 
and Rural Affairs, will manage a portfolio similar to that 
which he presided over from 2003-2007 as Minister for Rural 
Affairs and the Environment.  Dolores Cristina, a popular 
politician elected from two districts and formerly Minister 
for the Family and Social Solidarity, will become Minister of 
Education and Culture.  John Dalli, a former Foreign Minister 
who resigned from Parliament in 2004, was appointed the 
Minister for Social Policy. Finally, as noted above, Giovanna 
Debono retains her position as Minister for Gozo, the second 
largest island in the Maltese archipelago with around 30,000 
inhabitants. 
 
¶13. (U) The new government and cabinet officials were sworn 
in March 12, but most have yet to assume their posts, with 
some ministries undergoing extensive reorganization. 
Ministers are expected to fully assume their duties after the 
Easter holidays, i.e. around March 24.  MFA is the exception 
to the rule, with new FM Tonio Borg accompanying PM Gonzi to 
Brussels for an EU summit yesterday. 
 
¶14. (C) Comment: In a conversation with the Ambassador prior 
to the election, PM Gonzi lamented quite bluntly to the 
Ambassador that the elected Nationalist Party MPs offered a 
limited talent pool from which to select ministers that are 
matched well with their competencies and are able to form an 
efficient working government.  (The PM wished it was possible 
to draw ministers from business or academia, something that 
 
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is not possible in Malta.)  While the PM's point is well 
taken, the appointments of Borg and Fenech, in particular, 
are excellent news. End comment. 
BORDONARO