Parliamentary Secretary in the Finance Ministry Tonio Fenech said yesterday he is confident the convergence report on Malta’s plan to switch currency from the lira to the euro, which will be presented today, will be positive and that Malta has passed all the criteria required by the EU to adopt the euro.
“I am confident that we have passed all the necessary criteria. The report will give us a clear indication if Malta has done this in a sustainable manner,” he said.
Mr Fenech explained that the convergence report will give a clear indication as to whether Malta, along with Cyprus, will be given the go-ahead from the European Commission to introduce the euro next year.
Furthermore, he pointed out, there were several other positive reports that pointed towards Malta’s preparation for the euro.
The Maltese government submitted its formal application to the EC to adopt the euro on 27 February. In its
letter, it called on the EC to analyse whether or not the country’s economic and financial situation was compliant with the established criteria necessary for an EU member state to adopt the single European currency.
The letter specified points regarding the adjustment of the government’s excessive deficit, national debt levels and the rate of inflation, as well as interest rates.
While the deficit had been reduced to 2.6 per cent of GDP (Gross Domestic Product) by the end of last year, and should fall by a further 0.2 or 0.3 per cent this year, national debt levels are also under control.
These were reduced from 74.2 per cent of GDP in 2005 to 68.3 per cent last year, but the government’s target is to reduce national debt to the EU reference point of 60 per cent of GDP by 2009.
Questions arising from the European Parliament (EP) yesterday, however, cast a shadow of doubt on the eligibility of Malta, as well as Cyprus, for eurozone membership.
European Parliament member Alexander Radwan – who serves as the European People’s Party (EPP) spokesman for the EP’s Committee on Economic and Monetary Affairs – yesterday unleashed an attack against the Commission’s expected nod of approval for Malta and Cyprus today.
Malta’s Nationalist Party is itself a member of the EPP.
Speaking in the European Parliament yesterday, Mr Radwan questioned the accuracy of the fiscal data presented by Malta and asked why the country was being considered euro-worthy when its level of public debt had not been reduced to below 60 per cent of gross domestic product as required by the Maastricht Criteria.
Contacted by The Malta Independent yesterday, Mr Radwan said there is a “substantial need to clarify” the matters raised and he deemed the Commission’s move, expected this afternoon, as “anti-democratic”.
He remarked: “Firstly, given the past experiences with Greece and Hungary, we are questioning whether the Commission is sure that the data supplied by Malta is accurate and we are asking the Commission to verify such data and provide a guarantee that it is correct.
“On the matter of Malta’s public debt not having dropped below the 60 per cent of GDP as required by the Maastricht Criteria, we are seeing this as an instance of different criteria being applied for different member states.”
Furthermore, Mr Radwan described the fact that the Commission intends to submit a positive recommendation for Malta’s euro adoption bid to European finance ministers in June as “an affront against democracy”, in that it leaves little time for the EP to formulate a statement on the issue.
“We will of course be asking the European Commission to follow up on these matters, which will also be discussed within the Committee,” Mr Radwan added.