Prime Minister Joseph Muscat said that there is a resolve that all that is plausible and possible will be done to avert Greece quitting the Euro. It is in nobody's interest that any one country quit the Eurozone, nevertheless there must be a genuine commitment towards reform.
The Prime Minister was addressing the 2nd Annual Symposium EU-Asia Relations in Financial Services in Hong Kong. The Executive Chairman of the Malta Financial Services Authority Joseph Bannister also addressed the panel session of the Symposium.
Dr Muscat said that the Euro was born first as a political and then an economic project. This fact gives rise to both reassurances and uncertainties, said the Prime Minister.
He argued that the main reassurance is that there is a political resolve in seeing the Eurozone not only survives but also moves forward. Thus, applying the obvious principles of economic, monetary, financial and fiscal theories to simulate possible scenarios in the face of crisis may be somewhat misleading. On the other hand, the main problem with this scenario is that political attitudes and appetites can change, and even though there are no signs of such changes, this has always to be taken in consideration.
There is the need for a thorough discussion on the future of the governance of the Eurozone. Undoubtedly, there needs to be more coordination of policies. Nevertheless, this should not lead to Member States ceding their right on fiscal policy. Even though it is arguably the most integrated regional bloc in the world, the European Union lacks the structures for such a development. Furthermore, moving in that direction would be a desktop exercise that ignores the realities of Europe and its history, and would create an even greater distance from citizens, which in turn would jeopardize the whole European project, said the Prime Minister.
The Prime Minister also gave an overview of Malta's sound economic achievements. He said that the Government's initiatives are reaping positive results. Over the past two years, Malta has established itself amongst Europe's top economic performers. The European Commission's Spring Forecast anticipates that at 3.5%, Malta, together with Ireland, will achieve the highest rate of economic growth in the European Union. With the third lowest unemployment rate in Europe, a fiscal deficit of 2.1% which is set to fall even further, a declining debt ratio in the region of 68%, and a low inflation rate, Malta is set to reach new heights.
Dr Muscat said that Malta financial services sector directly contributes to 8.5% of our Gross Value Added and 4% of total employment. Another 8.5% is believed to contribute indirectly through activities generated by law and accountancy firms, corporate services providers and treasury companies. This is witness to both the fact that we have a diversified economy, and also to the fact that there is plenty of potential for the future.
We have built a reputable jurisdiction, and we intend to keep it that way. We are assertive in the way we promote ourselves but we are extremely jealous of our reputation. Our due diligence on companies, promoters and senior officials of companies is rigorous and extensive. That is why we do not just want to attract business, but rather the right type of business. We have no policy of numbers, said Dr Muscat.
The Prime Minister said that Malta is realistic but unapologetically ambitious about its potential as a small European state on the financial services global stage enjoying access to the European single market, and offering peace of mind to investors focusing on Africa but wanting a European standing.