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Malta’s clean bill of health from Brussels

Debt is sustainable and the financial sector stable, Finance Minister Edward Scicluna has said, citing the European Commission’s review of Malta while lambasting the Opposition’s negativity over the government’s initiatives on the economy.

He was speaking in Parliament, which on Wednesday approved the Budget Measures Implementation Bill in its the second reading with 36 votes in favour and 28 against after a division.

Winding up the debate, the Finance Minister dwelt on the indepth review, saying that in the Commission’s judgement, debt sustainability and the financial sector’s stability, which had previously been at risk, were now under control. An imbalance in the macro-deficit procedure was not identified.

The Commission said the Maltese authorities had taken steps to strengthen provision practices by local banks and also that risks in the mortgage sector were under control, with the result that housing nominal prices were on the same levels as in 2008.

 

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The report also revealed that while debt in the private sector was high, pressure on this sector in Malta was below the EU average, Prof. Scicluna said. The household budgetary burden was also manageable.

On the other hand, the review on the economic and financial performance of the previous administration in 2012 had put the country’s deficit at 3.7 per cent, placing Malta under an excessive deficit procedure.

A number of PN spokesmen had used the debate to concentrate their criticism of the government on unemployment and the cash-for-citizenship scheme.

The Opposition, he said, had learnt nothing from the electoral result and resorted to harsh, negative tactics.

This was evidenced by its criticism of the energy project, which was to lead to a reduction in domestic electricity tariffs by an average of 25 per cent by the end of the month.

He recalled that on his first day in office he had been presented with the Nationalist government’s plan to increase tariffs.

This plan had already been communicated to the European Commission.

In its criticism, the Opposition made no mention of the Shanghai Electric Corporation’s investment in Enemalta, which would also contribute to strengthening the country’s finances.

He said that this corporation had a triple-A credit rating.

In the beginning, the Opposition had been in favour of the citizenship scheme but when it became known the government would attract €1 billion in investment, it backtracked and started creating obstacles with the motion presented in the European Parliament. The motion targeted Malta and excluded all other EU states that offered similar citizenship programmes.

Prof. Scicluna said the Budget contained 100 measures aimed at strengthening participation in the labour market, enhancing the quality of education and training, reducing bureaucracy and checking corruption.

The Bill was presented on November 4 and the House devoted 10 sittings to debate it in second reading. This being a money Bill, the committee stage will be done in plenary session. No date has yet been announced.

 

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– Friday, 14th March, 2014


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