Opposition and Labour party leader Joseph Muscat is calling on government to reduce the tax burden and invest in the economy.
Speaking to BusinessToday on the eve of this weekend’s European election, Joseph Muscat pledged his party’s support to the European Socialist Group’s (PES) manifesto, that is calling for an ambitious European recovery plan.
“We believe that in order to stimulate the economy one has to reduce the tax burden and invest in the economy. Unfortunately, while the deficit has been soaring during the first four months of 2009, capital expenditure has decreased,” Muscat said.
Addressing a press conference on Monday, Joseph Muscat was quizzed about his views on how the economic crisis should be tackled and what he as PL leader was proposing as an alternative to the measures being taken by government.
Muscat echoed PES President Poul Nyrup Rasmussen’s words that Europe needed “to do more” and create a “new recovery effort” to fight the recession and protect employment which he said was in “freefall”.
He warned Prime Minister Lawrence Gonzi not to paint a “rosy” picture and to be more forthcoming with the people to explain the realities of the state of the economy.
Put into the context of a European election, Joseph Muscat explained that the PL will be working ‘hand in hand’ with the PES manifesto that refers to the economic crisis that is facing Europe.
Joseph Muscat expressed his support to PES President Rasmussen’s proposal for the issue of ‘Eurobonds’ as a possibility to stimulate trust in Europe and further assistance from the European Investment Bank (EIB) was another.
The PES is calling for a new, updated Recovery Plan, “otherwise there will be 25 million unemployed in 2010. There must be real coordination focused on real investments. Europe also needs to do more for the countries of Central and Eastern Europe. It is in our common economic and political interest to prevent financial meltdown in those countries. Europe talks a lot about solidarity, now is the time it is really needed, it must be tackled now,” he said
Late last year, PES leaders proposed a seven-point strategy to update the European Economy Recovery plan including:
More investments: to generate new growth in EU Member States in 2009 and 2010;
More credit facilities: opening credit lines in the banking system for private investments and spending for the recovery;
A Pact for Employment: to stimulate the creation of new jobs, support the unemployed back into employment as fast as possible, and support existing jobs;
A Social Progress Pact: to tackle the social costs of the crisis, preventing a rise in poverty, inequality and exclusion;
Economic solidarity: strengthening financial support to member states who do not have sufficient means to stabilise their banking system and invest in recovery;
Better regulation: comprehensive, sound regulation and supervision of all financial instruments and players, including hedge funds and private equity;
Global action: including - strongly coordinated, proactive fiscal stimulus policies to take the world economy out of recession and on the path to sustainable development;
- completion of the Doha Development Round, ensuring that it benefits all countries; - achievement of the UN Millennium Goals, saying “if we fail, another generation will be lost to poverty and deprivation”; - strengthened IMF resources and new financing instruments to face down the rapid contraction of inward investment, aid and trade currently hitting the developing world;
No to slow down in negotiations for a new global climate deal: “on the contrary, the recovery must lead to economic transformation across the world for a low-carbon future”; Along with a reform of global governance which “was designed for another time.”