Labour leader Joseph Muscat insisted this morning that the real reason why Standard and Poor's were downgrading Malta's long-term ratings was the debt which had mushroomed under the present government and the financial problems of Enemalta, which was described as an ailing company in which the government was heavily committed.
Standard and Poor's had also mentioned, as other reasons, the low participation of women in the labour force, something which Labour had long pointed out. Labour would address this problem aggressively.
Another issue was the vulnerability of the economy due to its dependence on a few sectors and the indebtedness of the private sector.
There were all areas which the government was responsible for. Private indebtedness, Dr Muscat said, had risen especially because of government induced costs, not least the electricity tariffs.
Dr Muscat said Tonio Fenech's attempts to blame him for the downgrade was puerile.
He insisted that it had been the government's duty to get the Budget approved. Would a Nationalist Opposition vote for a Labour government Budget?
Furthermore, once the prime minister had known, very early on, that the Budget would not approved, he should have acted accordingly, rather than sought every means to stay in office. If was because of this that the country was suffering the downgrade.
Dr Muscat also pointed out that another credit agency, Fitch, had said that the postponment of the Budget approval was not a matter of concern.
Dr Muscat said S&P in their draft statement were also showing they did not believe the government. The agency was saying that the deficit was closer to 3% than the 2.2% which the government was claiming.
This government's credibility had evaporated and Malta needed change, Dr Muscat said. Problems could no longer be hidden and solutions could no longer be postponed. That applied especially for Enemalta, which was why the PL had prepared an energy plan which included a repayment schedule to reduce the corporation's debts. If Enemalta went down, it would drag the country down with it.
Replying to a question on the impact of election promises, Dr Muscat said the S&P report did not come as a surprise and this situation was factored in the party's plans and promises. It was for this reason that the PL had long stressed that projects needed to be prioritised. One could not go about spending millions on a bridge to nowhere, or a new parliament building, for example.
The PL was also aiming at economic growth by reducing power tariffs and bureaucracy and bringing about a business environment which encouraged investment. He pointed that none of Labour's announcement so far would raise public expenditure. Even the energy plan was based on private investment.