The Maltese government today welcomed an economic stimulus package proposed by the European Commission, saying they confirmed the strategy announced in the Budget.
"The Commission’s proposed plan highlights the need for significant investment to support industry, infrastructure as well as energy, arguing that measures such as these would support the economy’s short and longer-term growth. Government’s plans for 2009 include significant investments in infrastructural capital projects that will create demand and jobs in the short-term while ensuring the county’s longer-term needs. Also in line with the Commission’s proposals, education and training have had their capital votes expanded significantly to ensure the availability of human resources to make the best use of the wealth our measures are intended to generate," the government said.
It recalled the various budget measures noting that the Commission’s proposed plan emphasized the need to increase families’ disposable income, something which the Budget presented in November also addressed through a €46 million plan including further reductions in income tax (for the third year in a row), tax breaks to all mothers returning to work after childbirth, an energy benefit to low-income families and the full cost of living increase to pensioners.
THE COMMISSION'S PROPOSALS
The main elements of the European Commission's proposals are:
* Fiscal boost to be "timely, targeted and temporary" and amount to €200 billion, or 1.5 percent of the EU's gross domestic product
* Commission urges member states to commit some 170 billion euros to their own individual rescue packages, or up to 1.2 percent of their GDP, while some 30 billion is to come from EU sources, such as the European Investment Bank (EIB)
* Commission says the European Central Bank has scope to lower interest rates
* EU countries are urged to consider reducing employers' social charges on lower-income jobs
* Countries may consider lowering value-added tax, but minimum level of 15 percent still applies
* Commission suggests states consider system of guarantees and loan subsidies to companies in areas where credit is tight
* Member states may have to breach the EU's budget deficit ceiling of 3 percent of GDP during the economic downturn, but should cut deficits to below the limit once economies recover
* The Commission has proposed a law to the European Parliament allowing for a lower value-added tax rate for labour-intensive services
* At least 5 billion euros from the EIB, EU and governments for private-public partnerships developing green technologies in the car industry
* Commission will speed up payments of part of EU regional aid funds, of up to 6.3 billion euros
* 5 billion euros from unspent EU budget funds to improve energy links across the EU and improve broadband access
* Easier access to €1.8 billion in EU funding for job training
* Some €1 billion to develop energy-efficient houses; 1.2 billion on similar technologies for factories
* Structural reforms should be speeded up
* EIB aid for small and medium-sized companies (SMEs) increased by €10 billion to €30 billion in the next two years
* Commission wants easier aid rules for SMEs, ensuring that setting up a business takes no longer than three days in all EU states; scrapping requirement on micro-enterprises to prepare annual accounts; limiting capital requirements to 1 euro; ensuring public authorities pay invoices to firms in one month
* Doha trade talks should be completed; EU should seek "deep and comprehensive" free trade agreements in its neighbourhood
* EU should boost regulatory cooperation with U.S., Japan and Canada
* EU candidate countries to receive additional €120 million, to help them to secure up to 500 million in loans from international financial institutions.