European Competition Commissioner Neelie Kroes, also known by the victims of her anti-trust crusades as Steely Neelie, will today hold potentially prickly talks in Malta on the shipyards' privatisation and Maltese competition rules. EU correspondent Ivan Camilleri caught up with her ahead of her visit.

What is the main scope of your working visit to Malta and what will you try to achieve?
My main aim is to try to explain clearly all about our competition rules. This is something I do wherever I go and this is the main aim of my Malta mission. For us, competition policy is not just a goal but, an instrument with which to create a fair level playing field, primarily to the advantage of consumers. With a fair level playing field, consumers should get a better deal for less.

How would you describe Malta when it comes to the competition aspect of the EU policy? Has it moved on?
Yes, some progress was made but we are not there yet. I think that more can be done to fight cartels and to dismantle monopolies. Our Maltese colleagues in the Competition Authority are doing their utmost but they have quite a bit more to do. I am looking forward to discuss with them the way forward.
Some economists put forward the argument that in small island-states like Malta competition rules do not always work...
I don't buy that argument.

Some in Malta view the Competition Authority as yet another government department. Do you share this view? Where do you classify Malta when it comes to competition?
Well, what I can tell you at this stage is that we have clear rules and responsibilities that must be followed by everyone. I don't like to put Malta in some kind of category. However, although Malta is one of the new member states, you also have to take into account that Malta is different from the other new members because it was always used to a capitalist system while many of the other new members are still adapting to capitalism.
So Malta already has the experience and should be aware of its responsibilities. Therefore, the argument that "we are a small island and competition is difficult" doesn't make sense.

So basically you are saying that Malta is not up to standard.
What I am saying is that all member states should play on a fair level field. If you are not following these rules it means that certain sectors of your population are paying the price.

Let's talk about shipyards. The government is in the process of privatising this company. Do you agree in principle with the privatisation of this industry?
In essence I'm in favour of privatising activities that are not exclusively connected with a responsibility of a government. I believe in a free market. Sometimes, and I am not referring specifically to Malta, politicians are using the word privatisation in a way that I am not absolutely sure that we are talking about the same thing. If this means solely "getting rid of your troubles" then this is not really privatisation.
I'm aware that the shipyards' activity is very important for the Maltese economy but I am also aware that Malta did already get a special treatment in the accession negotiations. At that time Malta was granted a very good deal with an exceptional derogation from state aid rules. Malta was allowed to provide a huge amount of state aid to the shipyards but was also bound by a time-schedule to make the company profitable. State aid is taxpayers' money and it is worrying that, despite all this investment, the company is still not profitable.

The Commission seems to have some problems with the way the Maltese government is handling the process. Is writing-off the company's losses by the end of this year a problem? Will this be permitted by the EU?
At this stage I am very interested in discussing this with the Maltese authorities. I don't want to be in the driver's seat of this privatisation process. The most important thing for me is that the agreement struck in the accessions negotiations with Malta is fully observed.

So the writing-off of a further €100 million as the government is planning is in fact a problem for Brussels?
I am not going to react to this before meeting the government and I am sure you appreciate my stand before having proper discussions. It is a serious problem but we have to make clear conclusions.

But does Malta need the permission of the Commission to write-off these losses?
The Maltese government needs to follow the conclusions that were reached in the accession treaty. I'm sure that the government is aware that the deal on the future of the shipyards had already obtained an exceptional derogation.

Is it true that the Commission would have preferred the government to liquidate Malta Shipyards and start everything afresh?
It is not for me to say that. Those who are in charge of this process need to come up with a solution that fits our rules and regulations which are quite clear.

So for the Commission the issue is still pending... You will not act as a rubber stamp....
I am not used to being a rubber stamp and I think that my reputation is that I am not.