Increase in tariffs result of financial mismanagement

The rise in water and electricity tariffs was not only the result of high oil prices but also of the mismanagement of the country's finances, the Labour Party said.

Giving several examples, Labour finance spokesman Charles Mangion said the deficit two years ago stood at almost five per cent of the gross domestic product when the government did not have to subsidise any banks, as was happening overseas. Moreover, despite saving millions of euros in water and electricity subsidies and the closure of the shipyards last year, the deficit continued to rise.

The situation, he said, was alarming the European Commission, which was pressuring the government to cut its deficit to under three per cent in accordance with the stability pact.

The Finance Ministry, reacting to the comments, accused Labour of being detached from reality because it could not appreciate the fact that water and electricity rates depended on the price of oil.