Finance Minister Tonio Fenech said this morning that the government is fighting 'tooth and nail' for Malta to retain its Objective 1 status - the highest level for EU assistance.

Speaking at a business breakfast, Mr Fenech explained that in view of EU enlargement which included the admission of two 'poor' countries, the threshold had been lowered and the Maltese economy had just surpassed it.

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This, he said, was a statistical quirk and not the case of the Maltese economy having advanced enough not to benefit from the top level of EU assistance.

"We believe we have a case and we are negotiating hard," Mr Fenech said.

Even if Malta did not retain Objective One status, it would still insist on retaining the current level of funding for certain sectors.

Mr Fenech said the objectives of the forthcoming Budget remained economic growth, fiscal consolidation, job creation and investment in education, health and the environment. Another priority was to attract investment in Gozo. 

Mr Fenech said that on the whole, the economy was performing well, not least thanks to government incentives and assistance to business which was aimed at retaining jobs and investment.

He said that government cutbacks made twice this year were necessary in order to ensure that there was no financial slippage and the deficit was retained below 3%.