Saturday, September 18, 2004

Don’t stop there

First it was the cruise ships shunning Malta because tourists were no longer getting the same tax reductions since it joined the EU, and now it's sugar.

Prior to accession, Malta was able to buy sugar from any source it liked, at world prices, currently €200 a ton. But now it is part of the protectionist CAP and is subject to strict closed market prices, having to pay €840.

In was known that this was going to happen so, to pre-empt what the government knew would create adverse publicity, it agreed a special deal during the accession negotiations that a “state aid mechanism” could be introduced.

However, as you would expect from an organisation that claims to be committed to "transparency" it was not indicated where this aid was going to come from. Now people are beginning to find out.

According to the agreement only half of the amount payable is to be paid by the EU, the other half is to be paid by the Maltese government, that is, the Maltese people through their taxes. Therefore, this will actually worsen the budget deficit instead of reducing it, as the government is required to do under the accession treaty.

Even with state aid, consumer are having to pay nearly twice the amount for their sugar and, with consumption at about 35,000 metric tons a year, they are paying an extra €6.3 million a year, on top of another €8.3 million in taxes. The carefully negotiated deal therefore, is costing Malta over €14 million a year.

Noel Farrugia, opposition spokesman for agriculture, fisheries and rural development, is now complaining about the "bad deal negotiated by an incompetent government" and is calling for people to work together is to restore political integrity and credibility – starting with telling consumers the whole truth about the sugar aid scheme.

By all means Mr Farrugia, as long as you don't stop there.

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