Privatisation 'not on the agenda'

The government has no immediate plans to sell its shares in Bank of Valletta, Finance Minister Tonio Fenech has said.

He said the option remained a possibility in the future as the government believed it should act as regulator rather than an operator in such areas.

Mr Fenech was reacting to a report issued following an International Monetary Fund mission in Malta, in which it was suggested that the government should go ahead with its original plans to privatise the bank.

In October 2004, the government and Banco di Sicilia expressed an intention to sell their shares in Bank of Valletta to a strategic investor. The government has a 25 per cent share while the Siclian bank has 14 per cent.

Two years later, however, the government decided to halt the privatisation process after the call for expressions of interest failed to attract a proper strategic investor. The government said it would not dispose of its shares at any cost and that any disposal of the shares would be made in line with a number of criteria and not just on the price.

In its report, the IMF predicted that Malta's deficit would fall under the three per cent mark only in 2013. The EU has given Malta until next year to get its deficit back on track.

Failing to make the EU deadline does not worry Mr Fenech. The government's primary aim, he said, was that of safeguarding jobs and creating the necessary infrastructure and environment to support the creation of new and better jobs.

"The government is aware of the importance of reaching sustainable deficit levels. It has always expressed the importance that sustainable finances play in our economy, particularly in making our country attractive to investment. However, the achievement of this target shall not prejudice the government's top priority of safeguarding jobs," he said.

The IMF report also criticised the way the government was assisting specific companies to deal with the global financial situation and the concession given to companies to pay their taxes later.

Mr Fenech said the government did not agree with the IMF's stand on the issue. He said that not every company that asked for help was granted support.

Through the assistance of a specifically appointed task force, the government reviewed the situations presented by individual companies, identified genuine cases of companies that found themselves in a difficult situation as a result of a fall in orders and ensured that its support was linked with a commitment of investment by the company involved.

As a result, he said, the assistance had resulted in the commitment of around €30 million in new investment and the creation of a number of new jobs. This was over and above the government's social and economic commitment that had seen 2,500 jobs being safeguarded through the assistance provided.