Prime Minister Joseph Muscat downplayed the import of the Commission's first reaction to the government's Budget plan.

Meeting with the media, while he waited to be interviewed on TVM's 8pm news, Dr Muscat said the Commission's letter was not much different from that received last year according to the new EU governance system.

There is no overall concern by the Commission with regards to the general thrust of the Budget, as has been the case with another EU country (Italy, which revealed the details unilaterally).

The Commission only asked some specific questions which the government will reply by tomorrow for the Commission to give its definitive reply on 29 October.

One question regards what the government intends to do to increase its revenue through indirect taxation. Dr Muscat said the government is loath to give the details to the Commission for it fears that any leakage could hinder the government's plan to increase some prices because people would flock to purchase what will be increased.

One other request by the Commission regards the government's public expenditure which Dr Muscat interpreted as the Commission telling the government not to increase the number of people in the public sector.

Dr Muscat also spoke to the media about the COLA EUR 58c increase a week. He reminded the media that COLA is the result of a long-standing agreement between the government and the social partners but he also added that government will announce additional measures to help the socially-less well-off by measures over and above the COLA.

He also found time to reply to what Tonio Fenech said today when he urged the government to cut income tax when he (Mr Fenech) did not do so post 2008. Mr Fenech also bragged that PN government had given greater COLAS but, Dr Muscat pointed out, this shows, given the way COLA is established, there must have been higher inflation the preceding year.

Finally, Dr Muscat dwelt on the discussion at the European Council with regards to energy targets.

With the changeover to gas for the production of electricity and stopping the HFO usage at the power station, Malta will cut its emissions by the considerable amount of 1.2 million tons of emissions a year.

However, while Malta will thus have reached its 2020 targets ahead of time, there are other emissions that have greatly increased, through the traffic, through agriculture and through air-conditioning plants that are of the older models, based on gas.

The government intends to tackle emissions caused by traffic through the introduction of  more incentives to promote car pooling, a more clean public transport system and the like.

With regards to air-conditioning, the government will come up with incentives to help people move from the old types to newer and cleaner models.