In a divorce settlement, it is common for both parties to focus on immediate financial concerns. Yet it is the long-term financial consequences of divorce that frequently are more devastating. Here are some of the most common concerns and how to avoid them.
Taking the house. The spouse who will have custody of the children typically wants to keep the family home. While this may be desirable emotionally, it can be financially problematic.
A home is an illiquid asset that costs money to pay for and maintain. The parent with the children may not have the income resources to take care of both the home and the children, particularly if they give up other financial resources in return for the house. Consequently, it may be better financially to sell the home, purchase a more suitable residence, and split the balance.
Assuming equal is equal. The family home is a good example of the “dividing things down the middle.” Frequently, one person takes the house and the other keeps the pension and retirement account. Say both are valued at $400,000. The home is a cost-burden, while the retirement account is a liquid asset that can continue to grow tax deferred, probably at a faster growth rate than the home.
Not examining earning potential. Often one spouse has minimized a career in order to raise children. The settlement needs to take this into account, perhaps by providing extra money to the homemaking spouse to pay for additional career training or education.
Not thinking about taxes. Say it is proposed that one spouse keeps a $150,000 individual retirement accounts and the other keeps a $150,000 taxable investment account. Sounds fair. But it is not. The owners of the IRA will have to pay taxes on the money when it’s withdrawn at higher ordinary income rates while the other pays at capital gains tax rates on the investment gains as the assets are sold.
Not following through with your attorney on the QDRO. A spouse who will be receiving part of his or her spouse’s qualified retirement accounts will need a court order called a “qualified domestic relations order.” To avoid mistakes here make certain the attorney is aware of all retirement accounts and examine each plan for their rules regarding QDROs. Have the QDRO pre-approved by the plan before the settlement is final and start early in the approval process. Consider any available survivor benefits in the process.
Not insuring a divorced spouse. If you will be relying on your ex-spouse for any financial benefits take out a life insurance policy on your spouse to ensure the money will be there when the time comes. You should own the policy, so you know the premiums are paid. And buy the policy before the settlement becomes final so you know the spouse is insurable.
Finally, include your accountant and financial planner in the discussions as well as your attorney. That way long range ramifications can be thoroughly thought through and discussed before the divorce is final.
Money challenge to tribes' sentencing authority - MSN Money
FLAGSTAFF, Ariz. (AP) - American Indian tribes authorized to triple the amount of time tribal members can spend in jail say they're challenged by a lack of funding.
The increase in tribal courts' sentencing authority from one year to three years for a single crime came two years ago under the federal Tribal Law and Order Act. But a U.S. Government Accountability Office report released Wednesday showed that none of the 109 tribes who responded to a survey about the sentencing increase were taking advantage of it.
Nearly all of those tribes said they need more money and technical help from the federal government to provide public defenders, establish or update criminal codes, and have sufficiently trained judges as the law requires.
The report shows 36 of the tribes surveyed are working toward the new authority. Another 34 tribes were unsure whether they would go in that direction, while 31 said they had no plans to do so, the report said. The enhanced sentencing isn't mandatory for tribes.
Troy Eid, chairman of the Indian Law and Order Commission born out of the Tribal Law and Order Act, said tribes across the country are exploring the authority but it will take time to get all the elements in place if that's the path they choose.
"My impression is that within the next year, you'll start to see some tribes actually implementing the system," he said. "Tribes are being super careful. No tribe wants to get this issue wrong; it has to be legally correct."
The GAO cautioned the report isn't representative of all tribes. Congressional investigators identified 171 of the 566 federally recognized tribes that received federal funding for tribal courts to include in the survey, but not all of them responded.
Tribal leaders have said a year in jail for any crime under tribal law, including homicide, hasn't served as much of a deterrent on reservations. Members of the Navajo Nation Council have been debating whether the enhanced sentencing provision would help send a message that tribal officials are serious about combatting crime.
"The bad guys are saying they could get away with anything on the rez, which now pretty much is true," said Edmund Yazzie, chairman of the Navajo Nation Council's Law and Order Committee, and a former sheriff's deputy. "But now the committee is trying to take another look at it."
Seventy of the tribes surveyed said they had at least half the requirements in place to hand down lengthier sentences, but some are choosing not to because of associated costs, like probation. One unnamed tribe said it has had an effective criminal and civil justice system for 40 years without the requirement of a law-trained judge, and that hiring one from outside the community would be unreasonable.
The Hopi Tribe in Arizona set aside funds from its own budget to hire law-trained judges and a prosecutor last year to meet the requirements of the tribal law and order act, said tribal Chairman Le Roy Shingoitewa. The tribal council is expected to vote on an updated criminal code next month that Shingoitewa says could help ensure that victims get justice.
"Now we have some teeth in enforcing our laws. Previous to this, all we did is slap the hands of perpetrators," he said.
Tribes receive funding, training and other assistance through the U.S. Bureau of Indian Affairs and the U.S. Department of Justice, but it's not always enough.
The BIA said it has provided more than 60 recording devices to tribes to help them meet another requirement that they maintain a record of criminal proceedings. The agency said it has plans to give 15 more to tribes that request them and also has asked for $1 million more in funding for tribal courts in its 2013 budget justification.
The GAO recommended that the federal government clarify to tribes the funding sources available to help them pursue the enhanced sentencing.
Mato Standing High, attorney general of the Rosebud Sioux Tribe in South Dakota, said the tribe is fortunate in that it has the financial resources to meet many of the requirements under the Tribal Law and Order Act. The only thing missing is an updated tribal code that would reflect a new class of crimes, like rape, arson or homicide, with lengthier sentences, he said.
The tribe hasn't decided officially whether to move forward with the enhanced sentencing authority, he said, but is considering how to classify crimes after comparing them to state and federal crimes and penalties.
"Tribes really need to see it as an opportunity to exercise sovereignty and have more local control," Standing High said. "That's the goal of it, and I understand also that it takes a lot of resources that a lot of tribes don't have."
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Document: Money found in Price's safe proceeds of conspiracy - WFAA
DALLAS – Federal authorities say that $229,590 in cash found in a safe in John Wiley Price’s Oak Cliff home last summer, as well as another $230,000 in money from a land deal, were all proceeds of conspiracy to commit money laundering, bankruptcy fraud and bribery, according to a document filed Thursday in Dallas federal court.
FBI agents found the money in Price’s safe while serving search warrants on his home last June. They also served search warrants on his assistant, Daphne Fain, and political consultant Kathy Nealy.
Agents also seized $50,000 and $180,763 from a Dallas County builder who was set to pay that money to Price for the purchase of a vacant nine-acre tract on Grady Niblo Road in Dallas. The builder’s attorney has said he did nothing wrong.
Billy Ravkind, Price’s attorney, said Thursday morning that he was still reading the government’s filing and had no comment.
No one has been charged with any crime in the investigation, which is ongoing.
The U.S. attorney’s office made the allegations in a civil lawsuit filed to keep the seized money. In it, they detail how agents found the money in the safe, stashed in various envelopes. Documentation found with the money bundles includes various banks and addresses in Dallas, Forney and elsewhere.
Price filed for bankruptcy in 1996, and it was discharged in 2001.
Price, according to the government’s filing, has claimed ownership to $115,000 of the seized money. Fain, Price’s assistant, has claimed $114,590.
Price and his attorneys have fought the seizure of the money, prompting the government to have to file documentation of why they believe it was proceeds from criminal activity.
The FBI’s investigation went public last summer with the serving of search warrants.
FBI agents are investigating Price’s use of campaign funds, his land deals, the African heritage festival he founded known as KwanzaaFest, his expensive car collection, as well as various businesses controlled by his associates.
Agents are also examining his role in in the much-publicized controversy involving an alleged shakedown scheme that targeted the California developer behind a massive logistics center in southern Dallas County known as an inland port.
Money has changed – that’s the issue - New Statesman
Peter Selby responds to Nelson Jones's article Money and Morality.
When the St Paul’s Institute, working with JustShare, Penguin Books and the LSE, brought nearly 2000 people into St Paul’s for a public debate on the theme of Michael Sandel’s book, What Money Can’t Buy: the Moral Limits to Markets (see Nelson Jones, NS 25 May) it was because we knew the theme touched a nerve, not because we have an answer to peddle. The Institute has been engaged for some years, as an agency of the Cathedral, in seeking to get into debate with the financial institutions which are its ‘parish’; as such we could hardly think Sandel’s book unimportant, and we were delighted so many others thought the same.
That’s not the same as signing up to his thesis about the moral corrosion brought about by the intrusion of the market into all sorts of spheres to which it is not appropriate. Certainly we are signed up to the desire to get people thinking hard about which are the things that should be for sale and which should not be and, as Rowan Williams says in his review of What Money Can’t Buy, to do so on the basis of rational reflection rather than relying in feelings of revulsion when we see certain things getting a price.
Nelson Jones in his NS piece wonders whether things have deteriorated from some golden age when money didn’t play the part it now does, and points to many areas where things were much more monetised in the past than they are now. Tellingly, if slightly optimistically, he says we no longer sell people, and however bad the euro crisis gets we still won’t be doing that. There are examples he cites in the ancient world that are at least as unpleasant to think about as some of the examples Sandel gives of the intrusion of market thinking.
In my comments in the debate I voiced my own reservations about Sandel’s thinking, so much of which seems to me to address symptoms without digging deeper into causes. When he gives the example of prisoners being able to buy a cell upgrade, and when Nelson Jones points out that that has historical precedent, the deeper issue is not being faced by either of them: the selling off of incarceration as a business is common policy in the USA as it is increasingly in Britain. In the process of creating that market a financial interest is being created in locking people up. That can’t be unconnected with the fact that we in Britain lock up more people than other European countries and that a quarter of the rising number of prisoners in the world – and a third of all incarcerated women in the world, whose number has increased by a sixth in five years – are in the USA.
The figures that became a matter of public scandal during the Jubilee 2000 campaign for the relief of unrepayable third world debt showed all too clearly that the escalating power fo financial debt was depriving children worldwide of education, healthcare and life itself. The situation is infinitely worse than either Sandel or Jones portrays: the issue is not the buying and selling of things that should, or should not, be free, or whether people value things they pay for more than things they receive for nothing; in the end it is not about getting people to think more clearly than they do about whether markets should have moral limits though all these questions are important. What really matters is that in everything from the depletion of the planet’s resources to the requirement on Greek citizens to sell their democratic birthright to have their debts rescheduled money is deciding matters of life and death, and doing so more and more.
That’s why as a Christian and a theologian I am convinced money has acquired all the characteristics of an idol, aggrandising its power and claiming more and more of people’s lives. And that’s why, because of faith’s commitment to raise fundamental questions about anything that has the potential to be an idol, the St Paul’s Institute will go on engaging that debate at an ever more fundamental level. When it recently commissioned a report on the attitudes of those working in the financial sector (see Value and Values) we learned that most did not think the City should listen more to the Church’s guidance. But we now know, since the Sandel debate came to St Paul’s, that many people do want to know whether pressing economic questions have something to say about the meaning of life and whether those who profess faith are prepared to get involved in relating that faith to those questions.
Because, make no mistake, money did not acquire this power by accident. The last four decades, roughly since the massive oil price rises of the early 1970s, have seen vast increases in the amount of money in circulation, and technological advance has multiplied its speed of circulation. In the absence of means of regulating that the dominant policy has been one of deregulation, allowing the power of money to grow with its quantity. The results are not just the life and death issues I have described, but a situation in which all of us, rich or poor, are compelled to worry more and more about money and think more and more about it.
The issues of monetary reform, dismissed even by the independent commission on banking and widely ignored, are ones we need to press: just as ‘home ownership’ is a euphemism for housing debt, so ‘fractional reserve’ is now a synonym for debt multiplication: is one of the questions we need to ask about the post-2008 crisis whether the system on which we have relied for money creation for nearly a century fraught with inherent instability? I ask the question not because the Institute has a recipe or a policy to commend, but because it is our passion as a community of faith to ensure that these questions are honestly faced. The Sandel debate, and the Jones response are just a start.
Peter Selby is one of the interim directors of the St Paul’s Institute, and author of Grace and Mortgage: the Language of Faith and the Debt of the World. He was until retirement Bishop of Worcester, and Bishop to HM Prisons.
Open Thred: Obama's Money Problem - News Busters
“The money is a huge problem,” confides a senior campaign maven. “We’ll see how long we can stand it. The money alone can’t beat us, but if we get bad jobs numbers a couple months in a row, then all of a sudden, things could get kinda hairy.”
That Obama should find himself on the losing end of a dash for cash is, to anyone familiar with his 2008 campaign, mind-boggling. Four years ago, the upstart candidate had the temerity to take on not only Hillary Clinton but the Clinton fund-raising juggernaut—and kick its ass. The mythology today is that the prodigiousness of Obama’s buckraking was all due to small donors and the juju of the web. Not so. Obama went toe-to-toe with Clinton in competing for Wall Street donors and whipped McCain among the Masters of the Universe. And the expectation was that his fund-raising prowess would be all the greater as a sitting president. Obama would raise $1 billion. His White House–sanctioned super-PAC would haul in at least another $100 million. Obama might fail to secure reelection, but his team would never find itself in the position of hoarding its pennies.
And yet here we are. Although Obama is surely raising a boatload of dough, it appears his campaign (combined with the DNC) could fall short of its goal of $750 million. (Its April fund-raising total declined to $43.6 million from $53 million in March.) Meanwhile, the pro-Obama super-PAC, Priorities USA Action, has raised less than $10 million since setting up shop more than a year ago—$2 million of it from Jeffrey Katzenberg—leading a highly placed Democrat involved in the reelection effort to describe it to me as a “fucking abysmal failure.”
Bill Burton, the former White House deputy press secretary who is one of two men running the super-PAC, disagrees. It’s still early, he says, and professes “no doubt” that his group will reach its $100 million target. But Burton allows that the task has been harder than he anticipated. “We had to spend a year talking to donors, educating them about why super-PACs would matter, even though in 2008, I, as the president’s spokesperson, and the president himself were saying, ‘Do not give to outside groups,’ ” he says. “And we had to do that with the group of people who are automatically skeptical of money in politics.”
But one of the most vaunted fat-cat-wranglers in Democratic history tells me that this is only part of the story. “There are several things going on,” this person explains. “Number one is the shabby treatment the president has given his donors. Unlike Clinton, who loved them and accommodated them, Obama announced he didn’t like big money and gave them the back of the hand. Point two is the president’s campaign announced—or not announced, they let it out, it got in the press, it got in the ether—that they were going to raise $1 billion. So when they come to you and say, ‘We need two-fifty,’ the answer is, ‘What the [f---] do you need my two-fifty for? You’re going to raise a billion! Not a hundred million. A [f---ing] billion dollars!’ You’re getting into federal-budget territory with that kind of claim.
“Three is the Obama donors aren’t scared. They think this is a slam dunk. They don’t think the president’s in trouble. They look at the Republican-primary process and say, That group of [f---ing] clowns? Fourth, Burton and his partner are great guys, but they have no experience in fund-raising. They thought that with the patina of the White House, the checks would just roll in. Wrong.
“Then, everybody looks to George Soros. ‘Why won’t George throw in?’ I know George pretty well. Early on, he wanted to come in to make his case on the economy. George doesn’t want legislation tweaked. He doesn’t want a rule changed. He wants his ideas heard out. But George couldn’t get a meeting in the White House. And then George is saying, ‘Where are the Obama money people with their 5 and 10 million dollars? Where is Penny Pritzker, Exhibit A? Why isn’t she throwing in 10 million?’ And that is a very good question.”
A prominent private-equity player in Gotham who supports Obama agrees with all of that but adds another insight. “Among rich Republicans, the view of Obama is that he’s the Devil,” this person says. “But on the Democratic side, certainly on Wall Street, there’s no visceral reaction against Romney. So if I give $10 million, I’m out the $10 million, and I’m gonna pay more in taxes if Obama wins. And I’m doing it against somebody who—I may not agree with his social views, but I don’t think he’s a bad person. And I’m not really into negative advertising, which is what a super-PAC would do … Then there’s the fact nobody on Wall Street thinks Obama gives a shit about them. They think his attitude is, ‘If I lose Wall Street, it’s not the end of the world.’ And they’re right.”
Whatever the causes, the consequences for Obama may prove dire. Burton reckons that, in the end, the cumulative spending on the Democratic side will be about $1 billion, compared with maybe $1.6 billion on the Republican side. And while the latter may be exaggerated for effect—other savvy Democrats put the GOP figure at more like $1.3 billion—there’s little doubt in either partisan camp that we are about to witness the improbable development of an incumbent president’s being financially overmatched.
“It concerns me gravely,” Plouffe tells me. “From a political standpoint, I’m almost as worried about that as I am about the question of what the economy’s gonna do over the next three or four months.”
Sir Mervyn King admits BoE failed over financial crisis - Daily Telegraph
In a veiled attack on Labour and the FSA, he also revealed that he had pushed for a major recapitalisation of the industry in early 2008 but been rejected because "it wasn't a popular message".
"From the beginning of 2008, we at the Bank began to argue that UK banks needed extra capital – a lot of extra capital, possibly £100bn or more," he said in the second BBC Today Programme Lecture on Wednesday evening.
A bail-out was orchestrated in October 2008, and a second one in early 2009. Ultimately the banks raised a similar amount, with taxpayers injecting almost £70bn into Royal Bank of Scotland, Lloyds Banking Group and Northern Rock.
"That bold action in October 2008 could have happened sooner," Sir Mervyn said.
He said that after the ravages of inflation in the 1970s it was "understandable" that the Bank focused on the need to bring inflation down, "but conquering inflation was not enough to ensure stability".
"On all sides there was a failure of imagination to appreciate the scale of the fragilities and their potential consequences. No-one could quite bring themselves to believe that in our modern financial system the biggest banks in the world could fall over. But they did," he said.
Sir Mervyn King attacked Britain's banks for bringing the country to the brink of ruin and demanded urgent reform to spare "our grandchildren" a similar fate.
He has blamed the banks for the recession and stressed that an overhaul of the financial system, including the separation of retail banking from "risky investment banking", was essential "to make our economy safer".
The comments will pile pressure on the Chancellor not to cave into the banking lobby and to press ahead with planned legislation to ringfence retail banking by 2015.
"We don't build nuclear power stations in densely populated areas, nor should we allow essential banking services and risky investment banking activities to be carried out in the same 'too important to fail' bank," Sir Mervyn said. "It is vital that Parliament legislates to enact these proposals sooner rather than later."
He also pledged to crack down on the "vested interests [who] rise up to defend their bonuses and profits".
Sir Mervyn underlined the scale of the financial crisis by claiming that "almost all Britain's banks would have failed had not taxpayer support been extended" to the entire system at the end of 2008, and not just Royal Bank of Scotland and Lloyds Banking Group, the two state-backed lenders.
(Audio only)
"This was a bust without a boom," he said. "Our banking and financial system over-extended itself... The realisation of the true state of the banking system led to a ... deep global recession. Unemployment in Britain rose by over a million.
"To many of you this will seem deeply unfair, and it is. I can understand why so many people are angry."
Extensive reform is already under way, he added. As well as moving regulation back to the Bank and ringfencing retail banking, the Bank will have new powers from next year to "prevent a hangover by taking away the punchbowl just as the party in the financial system is getting going".
Some of those powers, such as possible loan-to-value caps on mortgages, "won't make us popular among bankers, politicians and even at times some of you [the public]", he warned.
Swiss financial sector plans big cost cuts-study - Reuters UK
* Half of firms want to cut costs 5-10 pct
* 40 percent aiming for cuts of 10-20 pct
* Private banking particularly hard hit by asset loss
ZURICH, May 31 (Reuters) - The Swiss financial industry - particularly private banking - is planning radical restructuring to improve cost efficiency, a survey showed on Thursday.
Audit and advisory firm Ernst & Young said half of the financial institutions it surveyed wanted to cut costs by 5-10 percent, while 40 percent of firms were aiming for cuts of 10-20 percent and 4 percent were hoping to slash more than 20 percent.
The survey was carried out by an online questionnaire in February at 23 large banks and 10 insurance companies.
"These figures are a clear signal that we are on the brink of further transformation in the financial sector," Bernhard Boettinger of Ernst & Young said in a statement.
"A temporary economic recovery would not be enough to stop this process. The industry is undergoing radical change."
Ernst & Young said insurance companies cited fiercer competition for new customers and growing price pressure as the main drivers for restructuring, while banks pointed to the cost of new regulations and more rapid client turnover.
It said private banks were particularly hard hit as clients withdraw their assets or turn to products with lower returns.
The Swiss banking industry is seeing a big outflow of European assets after the country came under international pressure to clamp down on foreign tax evaders who have stashed their wealth in secret Swiss accounts.
The Swiss parliament gave the green light on Wednesday for pacts with Germany, Britain and Austria aimed at taxing their citizens' undeclared assets. (Reporting by Emma Thomasson; editing by Keiron Henderson)
Money Flies Out Of Spain as Regions Pressured - Moneynews (blog)
Spain is the next country in the firing line of the eurozone's debt crisis, with spendthrift regions and shaky banks threatening to blow a hole in state finances and pushing funding costs towards levels that signal the need for a bailout.
The European Commission gave new help on Wednesday, offering direct aid from a eurozone rescue fund to recapitalize Spanish banks and more time for Madrid to reduce its budget deficit.
That helped lower the risk premium investors demand to hold Spanish 10-year debt rather than the German benchmark on Thursday, but it remained close to the euro-era record, at 520 basis points.
Bank of Spain data showed a net 66.2 billion euros ($82.0 billion) was sent abroad last month, the most since records began in 1990. The figure compares to a 5.4 billion net entry of funds during the same month one year ago.
Spaniards are worried about the health of their banks, hit by their exposure to a 2008 property crash, and have been sending money to deposit accounts in stronger economies of northern Europe.
The capital flight data predates the nationalization of Spain's fourth biggest lender Bankia in May when it became clear the bank could not handle losses from bad real estate investments, compounded by a recession.
Spain's centre-right government has contracted independent auditors to assess the health of its financial system in an effort to restore faith in its banks.
Spain must lay out its restructuring plans for Bankia to the European Commission (EC), a spokesman for the EU executive arm said on Thursday. He added that a domestic solution to the country's bank crisis would be better than a European rescue.
The government said on Wednesday it would finance a 23.5 billion euro rescue of the bank through the bank fund, FROB but senior debt bankers said that the syndicated bond market is currently closed for Spanish agencies.
REMOVING UNCERTAINTIES
The prospect that Spain might not be able to handle losses at its banks has pummeled shares and the euro, although both regained some stability on Thursday.
"What we need first of all is for the Spanish government to tell us its restructuring plans for Bankia, what options it is considering," said European Commission spokesman Amadeu Altafaj in a radio interview.
"From there, we will study the plans and see whether they comply with requirements for public aid."
Spain should carry out the refinancing of its banking sector, laid low by a decade of unsustainable lending during a property boom, by market mechanisms or government funds, rather than a European rescue which would have negative connotations, Altafaj said.
"The sooner uncertainties are removed the better," he added.
The government also hopes to clear doubts on Friday about how it plans to ease financing problems among its 17 autonomous regions.
Treasury ministry sources said a mechanism to back the regions' debt would be agreed at the weekly's cabinet meeting and figures showing they were on track to meet their spending cuts targets would be released.
Fitch Ratings downgraded eight regions on Thursday, warning that a failure from the government to adopt new measures would result in further ratings cuts.
Spain's Deputy Prime Minister Soraya Saenz de Santamaria is due to meet U.S. Treasury Secretary Timothy Geithner and International Monetary Fund Director General Christine Lagarde in Washington on Thursday.
The deputy PM will outline Spain's measures to tackle its crisis during the meetings, which were convened before Spain's situation reached boiling point, a government spokesman said.
© 2012 Thomson/Reuters. All rights reserved.
Updated: Financial situation worsens - PL spokesman - Times of Malta
(Adds government's reaction)
The government’s financial situation in April continued to worsen at an alarming rate, the Labour Party’s spokesman for finance said.
Karmenu Vella said that according to figures published by the National Statistics Office, the deficit had reached €232 million, which was the highest ever in the first four months.
The deficit, Mr Vella said, was €90 million more than in the same period last year. But, in reality, it was much higher as the €232 million figure did not include the expenditure on the new parliament project.
Mr V ella said it was clear that the problem was in recurrent expenditure, which had increased by 11 per cent. This was at a time when the economy grew at a much slower rate in nominal terms.
According to the latest financial figures, debt servicing expenditure increased by €5 million in the first four months when it had been planned to increase by €2.5 million for the whole of 2012.
Expenditure on social benefits (programmes and initiatives) increased by €57 million in the first four months when this had been planned to increase by €37 million (€20 million more than planned).
Contributions to government entities had to go up by €13.5 million in a year but these had already gone up by €12.7 million in the first four months.
Mr Vella said that, in the first four months, the government had already surpassed its aim for the year by around €87 million.
On debt, he said that this had gone up to €4,676.1 million. If the €100 million extra budgetary units and the €15 million from the European Financial Stability Fund were added to that, the debt would reach €4,791 million. This was already over the government’s €122 million target for the whole year.
In these circumstances, the government should explain if it still believed its targets and if it was confident that they would be met. It should say what measures it would take during the rest of the year for the country’s precarious financial situation to return to the established targets.
In a reply, the government said that while the opposition continued with its work to hinder investment, in a report on all EU states the European Commission said yesterday that the Maltese economy was growing at a higher rate than the EU average and noted that the country’s deficit was below the three per cent European limit.
The government said the opposition tried to give the impression that the deficit was growing month after month quoting statistics of particular months without giving the full picture
The country’s strong financial situation was certified repeatedly in the past months including by the Eruoepan Commission, the International Monetary Fund and the International Labour Organisation.
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