Fenech’s ‘speculative allegations baseless, harm ongoing negotiations’ – Finance Minister

Finance Minister Edward Scicluna lambasted Tonio Fenech's "speculative allegations" insisting these were baseless and "simply intended to try to harm the government's ongoing negotiations with the EU'.

Scicluna was reacting to a press conference given earlier today by the Nationalist MP, during which he asked whether the government had wanted Malta to enter into excessive deficit procedure (EDP) in order not to implement "certain costly electoral promises".

"Mr Fenech's statements are worrisome on several counts, not least among them being his suggestion that the Maltese government somehow willingly wants to be in breach of EU rules on the 2012 deficit," Scicluna said in a reaction this evening.

He also accused Fenech of trying to harm the government's ongoing negotiations with the EU.

"Tonio Fenech's irresponsible claims can only weaken the country's position at the negotiating table at a crucial stage of the process, and go against the national interest," Scicluna said.

The minister said both Fenech and the PN were doing their "utmost to  shrug off responsibility for the financial situation it managed to put Malta in as at the end of 2012, onto the new government which is now faced with the task of accounting for it with the European Commission".

Scicluna said the Treasury's consolidated financial statement shows that Malta ended 2012 with a deficit of €342 million, "a far cry from the €145 million the previous administration had projected for that same year".

He said that the accrual system of accounts undertaken by the Treasury according to agreed EU approved public accounting standards and finalised by the NSO according to Eurostat's ESA 95 were carried out in the most professional manner.

"These figures, which include, the 3.3% deficit figure for 2012, were also approved by Eurostat. The same for the debt figures," Scicluna said.

Scicluna also cited the International Monetary Fund's concluding statement which said that "the fiscal deficit widened to 3.3% of GDP in 2012 amid the election cycle, triggering a reassessment of Malta's public finances under the EU Excessive Deficit Procedure."

According to communication between the government and the European Commission it transpired that Malta "failed to comply with the EDP benchmarks both with respect to the 3% deficit thresholds and a pre-agreed debt level".

"In other words the Commission is presenting both these deficit and debt figures as unambiguous proof that Malta failed to comply with the Treaty requirements," Scicluna said.

The minister also reacted to comments by Fenech over budget 2013. According to the former finance minister, while government retained the positive framework, it however reviewed government's income and expenditure prompting a higher deficit.

But Scicluna argued that "one has to note the series of binding commitments entered into by Tonio Fenech and his government prior to the recent election", in an apparent reference to a series of collective agreements carried out before the election, the agreement on University funding and the spending on the pharmacy of your choice scheme.

According to Fenech, these only cost €10 million.

In a concluding statement, Scicluna said the government was committed to keeping its public finances under control so as to reach its deficit target.

"It is likewise committed to keep to its electoral programme," he added.