Lawrence Gonzi said that there were three main issues which were addressed during the summit and these included the Greek debt crisis, the Euro 2020 goals and the upcoming G20 meeting.

The Prime Minister said that the Greek crisis was a lesson which the whole of Europe needs to learn from. “We must keep in mind that while Greece did find itself in the situation which it did, it is working very hard to lift itself out of the mire with very tough austerity measures,” he said.

He continued: “We must also bear in mind that the Greeks have not made a request for any cash and the mechanism which we agreed on will only come into effect as a last resort.” Dr Gonzi confirmed that the fund will only be requested by Athens if it really cannot obtain viable capital (with decent interest rates) in order to refinance its maturing loans. The main problem which the Greeks had in their lap was the fact that it was borrowing money at 6.5 per cent compared to the usual rate of about 4.5 per cent – this means that in real terms, it was actually increasing its deficit and in turn, its national debt.

During question time, the author pointed out that international markets jumped up overnight and the euro strengthened by about 0.5 per cent overnight against the dollar and asked Dr Gonzi whether this was a preliminary sign of success. TMI also asked whether the financial state of any other countries was discussed. Dr Gonzi agreed, saying that the indications were that the markets seemed to have been boosted as a result of the decision and the fact that the euro climbed against the dollar was encouraging. “We must not forget that while the euro was dented it was still very strong,” said Dr Gonzi.

He said that Portugal and Spain were not mentioned during the crisis talks and also remarked that the Portuguese had just announced a tight budget which is full of austerity measures. “We must also point out that Malta does not need to do this, while the recession was felt and it did impact the economy, our finances remain strong,” he said.

TMI asked whether the outcome could be interpreted as the EU having a ‘cure’ to the disease, but like in the health sector – emphasis is to be placed on prevention first and foremost. The Prime Minister gave these answers in the context of the National Statistics Office announcing that the government’s shortfall between recurrent revenue and expenditure improved from €199.5 million last year to €154.8 million in the first two months of this year. In other words, a lower deficit was recorded.

An enthusiastic Dr Gonzi replied: “Most definitely. Fiscal consolidation is the way forward and once that is in place, we can look forward to growth again. The 95 Maastricht Growth and Stability Pact has shown itself to be a good benchmark.”

He continued, and emphasised: “We must learn from this lesson. Fiscal consolidation is imperative.” The PM said it was still Malta’s aim to register a balanced budget, but due to the process being derailed by the recession, he would not commit to a target date to achieve it. “When your finances are sound, you have a safety net and this is the benefit Malta had in weathering the storm,” he said.

The Prime Minister said it was also important to take this lesson to another upcoming forum – the G20. “We must discuss the harsh lessons of this crisis in a broader forum to ensure that it does not happen (again).”

The PM also discussed the Euro 2020 goals which he said were very closely linked to the government’s Vision 2015. Beaming, he said: “We are on the right track. The Euro goals fit us like a glove.”

Dr Gonzi said that the Euro 2020 goals replaced the Lisbon Strategy. “But we should never underestimate what Malta achieved as a result of Lisbon and in such a short time. We managed to privatise the dockyards, increase productivity, improve our human resources, improve our education structure and we also phased out low end manufacturing to replace it with high value added industry such as pharmaceuticals, components and aircraft maintenance,” said the PM.

Dr Gonzi said: “We should not be afraid of reform. To progress we must implement reforms. We have implemented reforms but there are many more that are to come, such as the public transport system, the environment and energy generation.”

We must have smart, sustainable and inclusive economic growth. The PM also made reference to the fact that while Malta lost an average of seven jobs per day through the economic slump, it managed to generate 11 jobs on a daily basis, adding that ETC unemployment figures stood at five per cent which compares very favourably with the rest of Europe.

Other goals discussed included a follow up to Copenhagen with Dr Gonzi saying that the question which now has to be asked – and answered – is “Where do we go from here?”

Related to this, said Dr Gonzi, Europe reaffirmed its commitment to reduce carbon dioxide emissions by 20 per cent by 2020, while at the same time, increasing the output of green energy to make up 20 per cent of demand.