Prime Minister Lawrence Gonzi said this morning that Moody's downgrade of Malta's credit rating was an unfortunate consequence of the austerity measures being taken by some European countries, but Malta remained on the right course to further narrow its deficit and reduce its debt.

Moody's yesterday lowered Malta's sovereign rating to A3 from A2, the second downgrading in a few months. Other EU countries were also downgraded.

Dr Gonzi said that Malta did not have the debt problems of other countries since borrowing was almost totally local and bond issues were oversubscribed - but, he said, Malta had an open economy that was therefore sensitive to the situation in source markets.

Dr Gonzi made his comments when he toured the offices of EMD, a financial services and consultancy company which opened 10 year ago and has continued to grow.

The PM said this company was an example of how the country was and is performing, by being competitive and attracting business to Malta.

Dr Gonzi said the government would continue to place its emphasis on training the people so that they could take the opportunities which came their way. The government was also committed to further reducing the deficit, hence its readiness to include the Golden Rule on balanced budgets in the Constitution.

Asked to comment on Franco Debono's speech in parliament yesterday, Dr Gonzi said he viewed the speech as a positive contribution by Dr Debono. He had made several valid points which the country needed to concentrate on.

Dr Debono spoke on the need for constitutional and institutional reform to modernise Malta's governance.  (see separate story - http://www.timesofmalta.com/articles/view/20120213/local/airmalta.406655 )

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