Malta is ready to discuss a proposal within the EU for reduced VAT rates on labour-intensive manufacturing industries on condition that such rates would also include pharmaceuticals and food, Prime Minister Lawrence Gonzi has told Parliament.
Replying to questions after a statement on last week's summit of EU government leaders, Dr Gonzi said that no agreement had as yet been reached because Malta continued to maintain its strong position of keeping its reduced VAT rate on food and medicines as agreed in the accession treaty.
The debate continues in March at a meeting of EU finance ministers.
In his statement, Dr Gonzi said Malta would cooperate and contribute towards a solution on the Irish referendum issue.
On questions dealing with the energy sector, the Prime Minister said that the government was ready to invest to reach emission reduction targets and the EU had recognised Malta's circumstances as an island.
When he spoke on the EU economic stimulus package, Dr Gonzi said that in the budget the government had projected for capital investment which went beyond the 1.5 percent mark advocated by the EU.
He said the government was closely following the automobile manufacturing sector because there were factories in Malta which totally depended on this market.
The government was also following the tourism sector closely because its success depended on what happened to the British, German and Italian economies, among other factors. Malta could benefit from economic incentives in those countries.
Referring to state aid with particular attention to Gozo, Dr Gonzi said that the EU had changed the de minimis regulations. This was advantageous to Malta because it permitted the possibility of better investment in Gozo.
The Prime Minister also spoke about the projected windfarm at Is-Sikka l-Bajda. Although various studies had been concluded, other technical studies remained to be done. These included studies on the environmental impact and another on the force of winds in the area. He added that Malta needed a large windfarm that could generate electricity which could be sold in Malta and in neighbouring Sicily. It was therefore crucial for Malta to invest in the electricity cable joining Malta to the European electricity grid. This would address one of the major energy security problems in the Maltese manufacturing sectors because investors would be satisfied that Malta had enough electricity supply capacity.
In reply to questions on the sixth seat for Malta in the European Parliament, the Prime Minister said that as a result of initiatives taken by Malta and Spain, Malta could get its sixth seat before 2014 if the Lisbon treaty was ratified after the European elections next June. He also said that each country was to retain its European Commissioner.
Dr Gonzi also referred to the City Gate project, claiming that the investment would be spread over a four-year period. The government would insist with MEPA to speed up the procedures so that the project would get under way.
He said that EU regulations on international tenders were being relaxed in that the calls for tender were to be closed in 30 days’ instead of 78 days’ time. Because of international tenders which had to be issued, certain reports and studies would be published at the right moment. The government had to quicken the pace on investment for sewage treatment, for the construction of roads and schools, for better beaches and for a better product in the tourist zones.