Prime Minister Robert Abela has said that he is “heartened” by the positive reviews given to Malta’s fiscal and economic status by rating agencies, as he also vowed efforts will be “redoubled” so that Malta gets out of the Financial Action Task Force (FATF) grey list.
Abela was speaking in an interview as part of a conference organised by FinanceMalta.
Malta was placed on the FATF’s grey list following shortcomings on, amongst other things, the prosecution of tax crimes – something which will detract from Malta’s attractiveness as a financial jurisdiction.
However, the Prime Minister remains positive that Malta can get off the grey list as soon as possible.
The Prime Minister said that while the Government recognises and is working towards implementing the action plan agreed with FATF, he is “heartened by the positive signals already sent by two of the four rating agencies that rate Malta.”
“DBRS has confirmed our A rating, while Fitch have issued a press release to state that we will retain our A+ rating. The European Commission has also indicated its trust in our economy by upgrading our forecast economic growth by twice the amount it upgraded its forecast for the rest of the European Union,” he said.
Abela said that the Government is taking the FATF remarks seriously, and that the country is “redoubling [its] international efforts to successfully implement further reforms which boost resources to regulators, the courts, and our investigative and prosecutorial authorities.”
“Our economic vision shows clearly that good governance is one of our five principal pillars. Similarly, in our recovery plan, we have a priority area specifically dedicated to this, where we will be allocating another €10 million to strengthening our institutions,” he said.
The Prime Minister remarked that the digitalization of the justice system, the Permanent Commission against Corruption and the Asset Recovery Bureau amongst other things will also be strengthened.
Abela noted that he considers the financial sector as a “very valid and important contributor to the nation’s prosperity”, while also remarking that it forms an essential part of the diversification of Malta’s economy.
“To give one example; while our economy contracted by 7% due to the pandemic, the financial services sector alone rose by 6%. Financial services firms generate substantial numbers of high quality employment for our graduates and having a good financial services sector is a pull factor for foreign direct investment,” he said.
Asked about the ever-changing regulations the finance sector faces, the Prime Minister said that this is a reality the country must accept, as although the digital transition offers great opportunities, it has also created other risk factors.
“While in recent years, most of the effort to regulate the sector came in terms of the promulgation of new legislation, we are now more in the area of enforcement. While there is room for the authorities to improve, here, the onus will increasingly be on financial services providers,” he said.
Green finance is another area which the Prime Minister believes needs to be given more importance. “We are at the cusp of a veritable Green Revolution. Are financial services firms ready for this? Do they have the tools to provide access to finance for investments? Are they thinking of how to change that investment and financial strategies to take advantage and support the Green Revolution?” he asked.
However, Abela remained positive that this industry will benefit from getting the necessary attention from the Government in order to cater for their needs and changes which occur within the industry.
“The Maltese economy has doubled in size and offers huge opportunities to financial services firms. I believe that catering more for the needs of operators located in Malta could be a winning formula both for financial services firms and for the economy as a whole,” he said.