‘He is a sorry excuse for a Finance Minister’

Labour leader takes Fenech to task over Standard & Poor’s credit downgrade

Joseph Muscat brushed off criticism about any blame for Malta’s credit rating downgrade. Photo: Darrin Zammit Lupi

Joseph Muscat brushed off criticism about any blame for Malta’s credit rating downgrade. Photo: Darrin Zammit Lupi

Joseph Muscat yesterday brushed off criticism that he was to blame for the country’s credit downgrade, turning the tables on the Finance Minister.

Reacting to the second downgrade in a year by rating agency Standard & Poor’s, Dr Muscat said the minister was blaming everyone but himself.

“Tonio Fenech is a sorry excuse for a Finance Minister. Last year he blamed the euro crisis for the downgrade and now he is blaming Joseph Muscat,” the Labour leader said.

He addressed a hastily called press conference soon after the finance minister spoke about the credit downgrade while launching a Nationalist Party billboard with the slogan Strong Finances.

Mr Fenech blamed the Opposition for the downgrade, saying this was a result of its decision to vote against the Budget.

Dr Muscat highlighted the fact that the rating agency had singled out the high level of public debt, the indebtedness of public entities such as Enemalta and the lack of women in the labour market as the reasons for the downgrade.

“Fenech’s argument is puerile and the Government’s bubble that public finances are strong was burst by international experts,” Dr Muscat said.

When Standard & Poor’s referred to the Budget’s lack of approval in Parliament it was only stating a fact, he added.

He said it was the Govern-ment’s responsibility to ensure the Budget passed through Parliament.

“Shall we expect the PN to support all budgets presented by a Labour government?”

Dr Muscat said Prime Minister Lawrence Gonzi had known all along about the problems he was going to face with the Budget and decided to drag things out to the end instead of going for a n election.

“It was Gonzi’s choice to go for the second longest electoral campaign since 1987 and the country is now suffering the consequences of his decisions.”

The Budget ailed to make it through Parliament after Nationalist backbencher Franco Debono voted with the Opposition.

Dr Muscat said the country’s credit downgrade did not come as a surprise to Labour. The Government had long ignored the Labour Party’s warning that public debt levels were unsustainable.

He pointed to the description of Enemalta by Standard & Poor’s as “an ailing energy company”.

“Enemalta is in a dire financial state and unless it is rescued the company risks floundering and bringing the country to its knees,” Dr Muscat said, adding Labour’s energy strategy addressed this problem.

In fact, he argued that Standard & Poor’s analysis corroborated Labour’s argument that something needed to be done about Enemalta sooner rather than later and that the country could not wait another seven to eight years for the PN’s energy alternative.

Asked by The Times whether the Labour Party would factor the credit downgrade in its electoral manifesto, Dr Muscat argued that S&P’s analysis was in line with its own and cited the very same problems Labour had been flagging for the past years.

“In first nine days we have made pledges that stimulate growth which do not entail an increase in expenditure. Economic growth is crucial and we will cut bureaucracy, reduce energy costs and prioritise public spending,” he said.

Dr Muscat reiterated that a Labour government would retain the Budget presented by the outgoing Government, including the tax cuts.

No policy change in financial services sector

There would be no policy change in the financial services sector under a Labour government, according to Joseph Muscat.

Yesterday he pledged to keep the political consensus that has characterised legislation in the financial services sector, including on the regulator’s role.

In the wake of criticism towards the regulator over its handling of an investigation into a property fund administered by Bank of Valletta, Dr Muscat said one case should not cast a shadow on the good work done by the Malta Financial Services Authority.

While visiting Nexia BT, an accountancy firm, in San Ġwann, Dr Muscat said it was important that the regulator put the minds of Maltese and foreign investors at rest.

He reiterated his party’s opposition to a common European corporate tax and the financial services tax being proposed by the European Commission. Malta is resisting both moves.

Nexia BT managing partner Brian Tonna said the company was pleased both major parties agreed on a common way forward in the financial services sector, saying this created peace of mind.

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