MaltaToday, 09 April 2008 | Fenech refutes euro ‘price hike’ that ditched Malta for South Africa


NEWS | Wednesday, 09 April 2008

Fenech refutes euro ‘price hike’ that ditched Malta for South Africa

Matthew Vella

Perception can hurt – and it’s often worse than the truth. But Malta has been officially labelled ‘pricey’ by two British newspapers’ travel sections, and the reason is because of the euro changeover.
Both The Times’ and the Guardian’s travel sections this week have stamped Malta as an expensive destination following the conversion to the euro currency after the British pound sterling slipped 13% to the euro.
The London Times however recommended British travellers concerned by the falling value of the pound to go to South Africa because the Sterling slipped by 13% against the euro over the past year – making destinations like Italy and Greece increasingly expensive. On the other hand, it rose against the South African rand by 11%.
“One destination to avoid is Malta,” ran The Times’ bold claim. “Prices rose by about 10% with its changeover to the euro, so, combined with the fall in sterling, Malta has effectively become 17% more expensive in the space of four months.”
But Tonio Fenech, the minister of finance, has challenged the veracity of the figures quoted by The Times, expressing his disappointment for such a comment “that can be harmful to Malta’s interests”.
“The 10% figure is absolutely untrue. A recently published document by Eurostat reveals that provisional calculations show that in both Cyprus and Malta the total (one-off) impact of the changeover on headline inflation, during and immediately after the changeover, was probably between 0.2 and 0.3 percentage points.
“In Malta the annual harmonised indices of consumer prices (HICP – the EU’s indicator for inflation) rate for January 2008 was 3.8%. In the EU as a whole, the HICP also increased substantially in late 2007, with an annual inflation rate of 3.4% being reached in February 2008.”
The national statistics offices also quote January’s HICP annual rate at 3.8% and the 12-month moving average at 1.2%.
Fenech said the government will be contacting the Times in order to seek redress for the publication of such incorrect information.
The Guardian also warned that the cost of holidays in Europe was set to soar with the growing strength of the euro. It reported that the rising strength of the euro was “likely to be felt most by holidaymakers used to enjoying the relatively low costs of Malta and Cyprus, which both switched to the euro in January.”
The year 2007 was dubbed a ‘record’ year for the Maltese tourism industry, the January-November 2007 total registering 1,191,978 tourists – a 10.6% increase over the same period in 2006. Most importantly, Malta registered an increase of 12.6% from its core market – British tourists.
The Times claimed a three-course evening meal with wine, for two people, costs an average of £27.26 (€34.50) in South Africa, compared to £41.28 (€52.25) in Italy, while an equivalent meal in the UK costs an average of £55 (€69.71).

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