The Government intends to propose changes to the Cost of Living Adjustment mechanism to better reflect Malta’s productivity and bring it in line with EU expectations, Finance Minister Edward Scicluna revealed yesterday.

Prof. Scicluna underlined that he will propose an “escape clause” to the mechanism, which could be used when the economy is passing through a rough period. He made it clear these were just proposals, since an agreement had to be reached with all social partners.

The minister commented before the presentation of Malta’s draft National Reform Programme to the MCESD and the Malta- EU Steering Action Committee.

 “We intend to reform COLA to address the concerns of the European Commission. Our idea is to tweak the mechanism particularly in relation to productivity,” he said.

Full story in The Times.

FINANCE MINISTRY STATEMENT

But in a statement today, the ministry said the government did not have any changes to COLA on its agenda and it was not proposing any changes to the system.

It said the ministry made its representations with the European Commission following pressure over the past years.

The ministry said the minister was yesterday referring to an MCESD study on the subject which was proposing changes on which there was no agreement.

The ministry believed that the current system should convince the European Commission as it already contained flexibilities which social partners should acknowledge.

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