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Updated: Plans to raise electricity rates revealed by European Commission document - Muscat

(Adds Finance Ministry's reply)

The European Commission has uncovered the government's plans to increase electricity rates after the next election, Labour leader Joseph Muscat said this evening.

Speaking during a political meeting in Pieta, Dr Muscat said that a European Commission document clearly states: "Energy inflation is forecast to strengthen under the assumption of an increase in electricity prices".

This document was written under the assumption that this was the government's policy for next year.

The Labour leader said that the government had no credibility whatsoever in the energy sector. It was only now that it was investing in renewable energy and it had opted for a power station that worked on heavy fuel oil.

Rather than invest in solar energy it promised windmills.

He said that the PL's policy was based on alternative sources of energy, the generation of energy from gas and encouraging people to invest in renewable energy.

Photovoltaic panels would make more sense for families because Labour would also be reducing the electricity rates, he said.

The Labour leader said to reduce the deficit, the government had reduced investment in education and health by millions of euros. It also used up the funds from the public lotto concession in one year, instead of in 10.

The European Commission was now saying that the deficit would go up again next year. The forthcoming budget, he said, was an election one and the government would be generous. But the following one would take everything back with interest.

Although the Finance Minister had last year forecast a 2.3 per cent economic growth, the European Commission report was saying this would only be one per cent, showing that the government's predictions had gone haywire.

The report was also forecasting that the cost of living would go up at a higher rate than wages.

Labour, Dr Muscat promised, would reinstill confidence in the country.

MUSCAT'S PROMISE TO REDUCE TARIFFS IMPOSSIBLE - MINISTRY

A spokesman for the Finance Ministry said, however, that the European Commission’s report which Dr Muscat referred to was forecasting that the price of oil would remain a challenge next year.

This led one to conclude that Dr Muscat promise to reduce tariffs was impossible.

The spokesman said that the government this year allocated €25 million to Enemalta to ensure that prices remained stable and it intended to do the same next year.

The next budget, the spokesman said, would include measures to ensure this.

Moreover, the power station extension should be generating electricity soon leading to greater efficiency, which would also ensure that prices are not increased.

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