In his weekly blog, Finance Minister Prof. Edward Scicluna discusses credit rating agency Fitch’s recent report, and the recently-signed Memorandum of Understanding between Malta and China which is part of the new Government’s plan to return Enemalta to financial viability.

He explains that while Fitch’s appraisal is a fair one as it considers the state of public finances and Enemalta prior to the general election, he said that the new Government is addressing those came concerns in a careful manner so as not to disrupt Malta’s economic stability.

Prof. Scicluna explains that Fitch’s report considers the effect of the Government’s €1 billion contingent liabilities, of which 60% are attributable to Enemalta, and recommends that these be addressed in a sustainable manner.

However, Prof. Scicluna notes, Fitch’s report does not take into account the recently-signed Memorandum of Understanding between Malta and China regarding Enemalta, a solution found by the new Government which is fully in line with Fitch’s recommendations.

Prof. Scicluna explains how this agreement, which will see an established Chinese corporation injecting funds into Enemalta and taking over part of the Government entity’s debt, will allow the Government to continue reforming the energy sector, lowering energy cost, and return the loss-making entity to financial health.

Prof. Scicluna also notes that another in its own recently published report, credit rating agency Moody’s expressed confidence in the Governments plan to seek foreign investment to return Enemalta to financial health.

He notes that China is currently the second-largest economy in the world, backed up by advanced technology and with investments worth trillions of dollars around the world.

– Saturday, 21st September, 2013