Entertainment operators are fearing the worst if the political impasse is not resolved before the festive period hits a peak, amid worrying signs that the turmoil is already taking its toll on the industry.

“The longer the situation is prolonged, the worse it will be,” said Philip Fenech, head of the GRTU’s tourism and leisure section.

“Businesses are hoping for a political breakthrough which would give reasonable comfort, under the circumstances, to be able to somewhat move on,” he said.

Nearly a month since the start of a political crisis that has sparked resignations and street protests, the economy is showing signs of slowing down. In a survey conducted by the GRTU across 50 different economic sectors, 65 per cent of businesses reported a downturn over the past few weeks.

With Prime Minister Joseph Muscat refusing to heed calls to step down earlier than his declared mid-January date, the die is cast for further protests and a possible escalation of tensions as Malta heads into Christmas.

The longer the situation is prolonged, the worse it will be

“Since demonstrations started, there was a dip particularly in the Sunday lunch business, especially last week in Valletta due to the protest,” Mr Fenech said.

“People were either glued to the media portals following events or else decided to take part.”

Major private entities like HSBC bank as well as constituted bodies such as the Chamber of Commerce have announced they are cancelling or postponing their Christmas receptions in view of the political climate.

Security concerns last week forced the Miami-based Association of Certified Anti-Money Laundering Specialists to postpone a corporate event in Malta.

“The fact that major organisations cancelled their Christmas reception was the first signal that it is no longer business as usual,” Mr Fenech said.

“Coming from the leisure industry, I believe that, notwithstanding the political turmoil, social gatherings should not stop as they could be a means to defuse tension. Maybe I am being a bit romantic or pro-business, as I do understand the prevailing sombre mood.”

There had been some hope that Dr Muscat would be persuaded to change his mind and leave before Christmas if the leadership election scheduled for January had turned into a one-horse race, with Chris Fearne the only contender. However, MP Robert Abela yesterday announced his leadership bid.

Businessmen who spoke on condition of anonymity expressed their concern that this did not bode well for the festive period.

While steering clear of the merits of the political situation, Mr Fenech acknowledged that prospects would probably improve if it cleared up.

“It is very evident that some are hesitant to make commitments for the festive period. The political turmoil is definitely taking its toll. It is a bit early, but the worrying signs are there,” he said.

Apart from the entertainment industry, concerns are also being raised within the tourism sector.

“Though it is still early days, fears of further unrest have prompted a number of booking cancellations,” one source said.

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