Room for banks to reduce interest on loans - Fenech

Finance Minister Tonio Fenech has conceded that there is room for banks to decrease their interests on loans to businesses.

He however pointed out that the Malta Financial and Services Authority (MFSA) had no authority to dictate the rate of interests as set by the bank. "While I agree that banks could decrease the rate of interest, MFSA has no authority to order banks to do so. However, discussions do take place and I believe that the banks are doing the best they can," Fenech said.

Speaking at a business breakfast as part of the Budget 2013 consultation meetings, Fenech added that the increase in the number of banks operating on the island also helps in terms of competitiveness.

Reassuring businesses that government will continue to support them and workers, Tonio Fenech insisted that government was doing its utmost to retain Malta's Objective 1 status.

Objective 1 status means that a country receives more EU funds than it contributes to the EU. Those countries with a GDP of less than 75% of EU average benefit of such status.

Government has already said it would be arguing that it wants to remain an Objective 1 country, as Malta's higher-than-average GDP is the result of Bulgaria's and Romania's accession to the EU.

Reacting to the news that the European Union was no longer considering Malta as a 'poor region', Fenech had said their low GDP boosted Malta's ranking in relation to the EU average.

"Since we are still at discussion levels, I cannot give a concrete answer as to what will happen. But if we don't manage to retain such a status, we will insist on retaining the current level of funding for certain sectors," he said.

Fenech added that Malta would be "fighting" to ensure it held certain aid intensities.

The finance minister also gave a general overview of what the forthcoming budget will entail. Similarly to this year's, Budget 2013 will focus on delivering economic growth and sustaining job creation, to strengthen Malta's fiscal stability, invest in employment, the enterprise, tourism and education.

Priorities will be given to sustain a society with equal opportunities for all, the environment and Gozo.

Fenech also reiterated that given the international economic scenario, it had been necessary for government to review its budget to be able to control its deficit below the 3% target.

Addressing the event, ArrowPharm managing director Sergio Vella called for improved efficiency to the island's energy provider and investment in education and infrastructure.

"Education is our insurance policy for the future. Secondly, it's important to invest in Research and Development and excellence centres," he said.

Vella also pointed out that with the advancement of technology, it was important that even shop floor assistants are given proper training.