'Unfair' Moody's upsets government, but economists call attention to debt factor
Malta, eurozone governments protest in unison against Moody’s downgrade; but economists warn that credit ratings agency was motivated not just by the eurozone crisis, but also by national debt factor.
15 February 2012, 12:00am
Duncan Barry
Duncan Barry
1 min read
Former Labour finance minister and economist Lino Spiteri.
Governments all over Europe reacted angrily to yesterday's downgrade by credit ratings agency Moody's, which slashed Malta's status (among those of other countries) from A2 to A3.
Prime Minister Lawrence Gonzi reacted by insisting that his government's deficit-reduction programme was on track, and that its debt status was not threatened by exposure to foreign lending.
Finance Minister Tonio Fenech went one step further, acknowledging his personal frustration at the news.
"I must admit that I'm disappointed with Moody's rating, also because during the communication we had, the agency did not refer to anything specific in Malta but continually referred to the international climate scenario," Fenech said.
However, leading economist Lino Spiteri warned that part of the reason for the downgrade remains Malta's weak debt metrics: a factor independent of the international crisis..
"There is no doubt that the external situation was influencing Malta badly," he told MaltaToday, "but if Moody's are motivating their cuts on the basis of (Malta's) weak debt metrics, then that is a domestic factor and references to the island's economic performance do not remove that particular factor".
Read more in todays midweek edition of MaltaToday
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Nahseb li Moody's ghandhom xi 'cuc malti' jahdemn maghhom!!!!
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Dear gwanni w martin, what is exactly your message? Are you perhaps doubting Lino's expertise as compared to your amateur accountant friend?
Jeffrey Vella •
WELL,I GUESS MOODY'S ARE ALL WRONG AND OUR FINANCE MINISTER IS IN THE RIGHT.
WHAT ARROGANCE !
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Meta jigi l-upgrades kollox ikun sew imm ameta jigu d-downgrades noqomsu! In qed jghix ir-realta, jaf li s-sitwazzjoni ekonomika mhi xejn sew. Hawm krizi kbira ta' flus fl-idejn.
Ukuf tridu ma jitlax d-dejnbi progetti "bla sens" bhal "monstru" tal-belt li ma jrendi xejn u b'konsulenzi mhallsin l-eluf kbar ta ewros l ujfasslu ghal falliment-Arriva case in point. Kif tridu li johduna bis-serjeta?
SME are managed more professionally than this country!
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Leading economist is only half the truth. The whole truth is leading staunch labour econbomist Sabih San Anton!
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I an sure MOODYs follow a country's general situation and what is going around. When finances call for corrective measures, actions like Minister Pulicino took in recruiting consultants at phenominal wages for a few months, would surely be noted. For fairness sake it is not just Pulicino that is splurging the country's tax monies.
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Fl-ahhar iz-zejt jitla f'wicc l-ilma
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Iz-zejt tiela f'wicc l-ilma; l-elezzjonijiet tal-PN intrebhu biss ghax nefqu kull ma sabu fil-kaxxa u issa sfrondawwa bid-dejn. Ma kienux ghaqlin u l-prova ta dan hu l-inkwiet li se iddahluna fih!
