Government denies intention to propose changes to COLA mechanism
Finance Minister Edward Scicluna says current COLA mechanism is good enough to convince the European Commission on its flexibility.
Finance Minister Edward Scicluna denied government has any intention of proposing changes to the Cost of Living Adjustment mechanism insisting that this already enjoyed a certain amount of "flexibility" which social partners should recognise.
Scicluna was reacting to media reports saying that the government intended to propose changes to the COLA mechanism to better reflect Malta's productivity and bring it in line with EU expectations.
"The government's agenda does not include changes to the COLA mechanism," Scicluna said in a statement.
However, The Times have reported him as saying that the government "intends to reform COLA to address the concerns of the European Commission. Our idea is to tweak the mechanism particularly in relation to productivity."
But now, Scicluna said that the Finance Ministry has made its representations to the European Commission on the viability of the current COLA mechanism.
The Malta Council for Economic and Social Development (MCESD) has carried out a study in which it proposes a number of changes to the mechanism. But to this day, these changes do not enjoy consensus.
Scicluna, the ministry said, is convinced that the current system can convince the European Commission that it shouldn't be changed, given the "flexibility" already employed in the mechanism.