Prime Minister’s opposition to COLA revision, retirement age increase

Prime Minister Lawrence Gonzi this evening told Parliament that the Maltese government had opposed two of the six country-specific recommendations as proposed by the European Council.

"We didn't agree with the recommendation to increase the retirement age and to revise the COLA mechanism," Gonzi said, adding that Malta didn't need to implement the recommendations.

He said that government was in favour of assuring a sustainable pensionable system, so much so that in 2006 new laws were enacted to ensure that adequate pensions are given.

Reacting to criticism raised by Opposition leader Joseph Muscat over the fact that Gonzi only objected to the recommendations now, and not a year ago when they were first proposed, the Prime Minister insisted the situation was different.

"The position of the EC has changed between then and now. Last year they said Malta should look into it, this year they said Malta should do it. In reality, nothing changed in their recommendation to what we have, but they insisted that Malta should speed up the retirement age."

Gonzi said that in 2006, government had increased the retirement age but this was going to come into force gradually over a period of 14 years.

"We didn't see the need to speed up the process as recommended by the European experts, even more so when it had been approved by the EU itself," he said.

With regards to the COLA mechanism, Gonzi said that he agreed that the wage increases should reflect increase in production, but not at the risk of diminishing the workers' standard of living. 

"While we agree that government should continue to monitor and discuss the mechanism with social partners, yet we believe it is not prudent for government to intervene over the inflation measurement on which the COLA mechanism is built," he said.

Gonzi added that Malta's heavy dependence on imported goods and services made it even more difficult, if not impossible, to separate the increase in price of imported goods and service from the domestic ones.

The Prime Minister's also reiterated Malta's position against a unilateral implementation of the Financial Transaction Tax insisting that if it were to be applied all in Europe it would scare business away and secondly as it would be shouldered by the economic operators.

Referring to a fiscal union, Gonzi said that issues related to national sovereignty and which had a direct impact on the citizens' daily life, should not be decided by Europe but by the individual member states. He insisted that "central Europe didn't have the democratic legitimacy to do this".

Intervening over points raised by Labour MP Karmenu Vella, finance minister Tonio Fenech said that Malta had been eyeing the propensity of gas as an energy-generator for the past 20 years, but never had the means or funds to build the technology.

"The Prime Minister today insisted that no country should heavily depend on oil. Today, he's listening to what the EC had told him but chose to ignore what we as the Opposition have been saying all along," Vella said during his intervention.

But in a reply, Fenech said that it was only thanks to Gonzi's intervention with the EU that Malta has been granted the funds to finance the interconnector between Malta and Sicily.