(Adds government's reply)
The government's attempts to blame the credit rating downgrade by Moody's solely on the eurozone crisis had been flatly refuted by the agency's report on Malta's economy, Labour MEP Edward Scicluna said.
In a statement, Prof. Scicluna said that the government's apologetic response to Moody's downgrade was that this is the automatic response to the eurozone crisis rather than a judgement on Malta's economic performance.
But a reading of the Moody's report showed that it explicitly refuted the government's explanation.
"Although Moody's agrees that the crisis has hit a number of countries, not every country has been hit in the same manner. Moody's points out that Estonia will keep its A1 credit rating. The same is true for the Czech Republic.
"The crisis has resulted in rating downgrades only for countries that were economically weak or had to provide life-support for their banks, adding that weak growth forecasts and low investment meant that it would be difficult for Malta to win back the coveted A1 credit rating."
Prof. Scicluna said that even if the crisis ended tomorrow, and demand for Malta's exports and services went up, the IMF estimates that the maximum growth rate the country could achieve was two per cent. The reason for this was the very low level of investment which fell well short of the level required for an A1 country.
Moody's also noted that Malta's projected low economic growth in the medium-term future would not lead to a debt reduction significant enough to win back its A1 status.
GOVERNMENT'S REPLY
In a statement, the Finance Ministry said that official statistics contradicted what the opposition was saying.
Eurostat statistics issued yesterday showed that Malta’s exports had increased by 54 per cent in the first six months of this year.
Moreover, the Maltese economy grew by 2.8 per cent in the second quarter of the year when the European average was 1.6 per cent.
While EU unemployment remained close to 10 per cent, in Malta this stood at 6.3 per cent, the fifth lowest in the EU.
A total of 6,000 jobs were created in a year and investment reached €792.1 million in 2010, an increase of more than 40 per cent over the previous year.
The number of tourists between January and July increased by 10 per cent and their expenditure increased by 13 per cent.
The government had always said that Moody’s was concerned about how the European economic environment could affect economic growth in Malta so it continuously stressed the need to remain focused on strengthening its finances, an essential factor for the country to remain attractive to investment and for employment to continue to be created.