Finance Minister Tonio Fenech yesterday said he agreed with complaints that bank interest rates were high when compared to the rate set by the European Central Bank.
“Interest rates can be slightly lower,” he said, adding there were no EU regulations to impose rates.
The ECB has slashed interest rates over the past two years to make credit available to businesses and encourage growth. Banks in Malta have lowered their rates but they are still a far cry from the ECB’s 0.75 per cent.
Mr Fenech was reacting to a complaint by Paul Abela, president of the Chamber of Small and Medium Enterprises GRTU, at a pre-Budget business breakfast. The minister said competition in the sector was important to encourage lower rates.
Speaking to the social partners at Rabat, the minister promised that the Government was “fighting tooth and nail” at EU level to preserve Malta’s Objective One Status, the highest level of funding a country can receive. Malta lost the status because it surpassed the GDP per capita threshold that dropped when the less advanced Romania and Bulgaria joined the EU.
Mr Fenech said this was a statistical quirk and the Government believed it had a strong case.
The minister used the consultation meeting held at the Xara Lodge, a farmhouse converted into a wedding hall, to extol the economic success achieved so far.
He gave no detail on what to expect in the forthcoming Budget but limited himself to outlining the Government’s priorities: fiscal stability, economic growth, more investment in education, the environment and Gozo.
From the floor he received a varied wishlist from union leaders, businessmen and the odd individual. Mr Fenech was urged to tackle the problem of precarious jobs; invest in the upgrading of industrial estates; better publicise Government aid schemes for businesses; encourage more students to continue studying; exempt hired cars from CVA charges; invest in childcare and child-minding services; upgrade the crafts village; and keep Sunday a day of rest and not turn it into another day of trade.
Mr Fenech took note and briefly addressed some of the concerns. But what will eventually make it into the Budget will only be known in the coming weeks.
ksansone@timesofmalta.com