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'Malta could trigger the next European crisis' - Le Monde

 - Thursday, 02 May 2013, 11:53

 

French daily Le Monde has raised the alarm on Malta’s economy, saying that it is likely to trigger “the next European crisis.”

“Malta’s tax system has attracted many deposits from non-residents, resulting in a bloated system that is too large for the government to save, especially seeing that it is currently undertaking fiscal consolidation having just emerged from the excessive deficit procedure last February.”

The report, published yesterday, says that should a crisis hit Malta, investors will probably be made to take a haircut on their deposits similar to the one in Cyprus, namely between 30-40% of deposits over €100,000.

The main concern raised by the study quoted by Le Monde is that Malta already has the lowest tax rate in the EU, putting further pressure on its fiscal sustainability.

The report does not even take into account the reductions in income tax that were brought in with the 2013 budget.

“Malta is considered to be a tax haven with little or no tax, no transparency and no real economic activity apart from online gaming.”

Le Monde warns that as international efforts against off shore banking, tax evasion and money laundering are stepped up, Malta could potentially lose out.

Another concern highlighted by the study is the fact that only banks with €5 billion worth of asset fall under the supervision of the European Union. This means that only Bank of Valletta, HSBC and CommBank Europe Ltd will be directly supervised.

The latter bank is an Australian subsidiary. The Le Monde report highlights how any crisis at CommBank could be easily absorbed by the Australian banking sector, but it would have a “disastrous” effect on the Malta economy.

A report by the International Monetary Fund in 2012 has already warned that Malta need to do more in managing the systemic risk posed by foreign banks. 

 

24 comments

Post Comment
Ceter Passar says:
08 May 2013 22:24

What do they mean by "especially seeing that it is currently undertaking fiscal consolidation having just emerged from the excessive deficit procedure last February.”????
What excessive deficit procedures?

Post Reply

Steve Fournier says:
06 May 2013 23:12

This is targeting and scaremongering tactic by France, with their 80% taxes for the rich and 60% for the rest to keep their money in their country. Many are already running off to Russian and other countries, and now Malta which does not have an inflated money base, and we certainly do not have the cheapest tax rate. If at all the tax rate is comparatively pretty high compared with our income.

Post Reply

A MIFSUD says:
04 May 2013 19:51

Over the centuries, Malta was occupied by Phoenicians, Carthaginians, Romans, Vandals, Byzantines, Arabs, Normans, Angevins, Aragonese and the Knights of Malta. It was only when the French brought their stinking presence here that the Maltese kicked out their overlords!  It looks like the French have not forgiven the Maltese for taking over the island and, horror of horrors, letting in the Brits instead....tough on them!

Post Reply

F A says:
03 May 2013 21:02

It is clear that this article's aim is to damage Malta's reputation. if people follow some financial news can easily determine that Malta is not in the same situation as where Cypriot banks.

Post Reply

bryan sullivan says:
03 May 2013 11:46

With 'friends' like the French, who needs enemies! what is Dr. Edward Scicluna waiting for to counter what was written in 'Le Monde' ?

Post Reply

Saviour Marquette says:
03 May 2013 08:54

The PN were in government for nearly 25 years, not only we were not the best in Europe but close to the worst and now after just a few weeks in  government you expect miracles?

Post Reply

Stefan Vella says:
03 May 2013 12:49

Do you even read and comprehend international news? Have you got an inkling on the subject of economics or do you just parrot what Super One tells you? Life was not a bed of roses under PN government, but any moderately informed citizen could know we were better off than many of our neighbours.

For a nanosecond, I just wished that Malta was really close to the worst nations and that Mr Marquette was experiencing the standard of living of the Greeks or Cypriots to name a few.

Post Reply

Jan Farrugia says:
03 May 2013 14:40

Saviour Marquette, can you try and grow a brain cell? Just one would be enough.

Post Reply

Jan Farrugia says:
02 May 2013 15:02

I had thought that Hollande was going to send usla Vallette's sword for display. I was wrong. He is sticking it in our backs.

This is nothing but a plan to destabilise our economy, destroy our gaming industry that originally was based in France.

Some years ago, France had tasken Malta to court because of our gaming laws that were effecting badly the French gaming industry that is totally owned by the French government. Thus, Malta really hit hard France due to our great success. Now, with a weak government in place, the French socialist government through its proxy loud-speaker Le Monde, in which the French gov has a 26% stake, is telling lies on us to start a panic run on our banks that would result in a big economic loss, with the hope that the gaming industry would lose out.

All this just after a few days from our Prime Minister's visit to the French President M.François Hollande who had lauded and endorsed our prime minister when still leader of the opposition, a few days before the elections.

Din tinten hafna

Post Reply

Antoine Vella says:
02 May 2013 23:50

Jan, why should the President of France be responsible for what Le Monde writes?

Post Reply

Jan Farrugia says:
03 May 2013 14:38

If you read again my comment you will find:

"..the French socialist government through its proxy loud-speaker Le Monde, in which the French gov has a 26% stake,.." That's just one reason.

Reason #2 is that the French are so nationalistic when it comes to national interests. The lost a massive amount of on-line gamin traffic to Malta. That was all PROFIT to the FRENCH GOVERNMENT because gaming in France is monopolised by the government even though according to the EU monopolies, stae te or otherwise, are against EU laws.

What I find really sad is that this came about just a few days after our prime Minister hugged M. Hollande who had earlier described our prime Minister in most beautiful terms. But then the La Vallete's sword, in a smoke and mirrors trick, got unstuck and Monsieur le president, by proxy, (le Monde's statement) , stuck it between our shoulder blades.

Sad isn't it.

Post Reply

Joseph Gaffarena says:
02 May 2013 14:39

L aqwa li malta taghna lkoll.
Laqwa li franco debono ghandu  id driver mieghu,
Xi kalvarju tajjeb gej fuq malta.

Post Reply

gil falzon says:
02 May 2013 14:14

This is a comment below the article. Deceptive title perhaps. Food for thought:

'...la même étude conclut que le risque pour Malte n'est pas du tout comparable à celui de Chypre à cause l'implication bien moindre des banques à risque dans l'économie réelle du pays. Mais ça permet, avec un bon titre, de faire une story. Bravo, Le Monde!'

Post Reply

Anthony J. Borg says:
02 May 2013 14:06

Do not worry guys....we have a new 'Par Idejn Sodi' now.

Post Reply

Manuel Briffa says:
02 May 2013 13:50

Ah, so that's where PL got it's game of saying one thing and doing the complete opposite then.

Post Reply

gil falzon says:
02 May 2013 13:30

http://www.lemonde.fr/economie/article/2013/05/01/malte-prochain-detonateur-d-une-crise-europeenne_3169131_3234.html

Post Reply

Paul Fenech says:
02 May 2013 13:27

If ia m going to loose 40to60% of my money deposited in local banks i should retieve the money as soon as possible. hide it in a field or in my mattress.

Post Reply

Jan Farrugia says:
03 May 2013 14:42

They are confiscating the matresses too I heard. I don't know about the fields. sarc off.

Post Reply

paul borg says:
02 May 2013 13:23

With Joseph Muscat as our prime minister we were promised to be among the best in EU. When reading the Le Monde report I guess that the people of Malta are heading for a very hard time, straight ahead to a brick wall!

Post Reply

George Malim says:
02 May 2013 12:50

It would be very helpful if the name of the report/study were provided in this article - or at the very least a link to the Le Monde piece that quotes the report. Which organisation produced the report and what is the organisation's agenda? Without knowing about the report's author, it's impossible assess whether the report should be taken seriously.

Post Reply

Robert Agius says:
02 May 2013 12:39

Good to see the visit to Hollande is having the desired effect! Thank you PL!

Post Reply

Peter Grech says:
02 May 2013 14:20

Haha

Post Reply

George Calleja says:
02 May 2013 12:17

Is this Le Monde report a way of saying thank you for the good relationship between Joseph and Hollande? This French paper should be reprimanded for creating false alarm. Edward Scicluna should issue an official denial to calm waters.

Post Reply

JJ Micallef says:
02 May 2013 12:15

A Hollande leaning paper contradicting their inspiration!

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