Former Prime Minister Alfred Sant told the European Parliament that one essential problem of the eurozone has become the increasing economic divergence between its different parts, notably between the north and south of Europe.  Dr Sant was reacting to the ‘Report on the review of the economic governance framework stocking and challenges’ presented to the European Parliament by MEP Pervenche Berès, Head of the French S&D Delegation, which he voted against.

Dr Sant said that the report emphasizes the coordination of economic policies of member states rather than a convergence of economic performance and outcomes. The report, said Dr Sant, supports the partial deepening of eurozone structures without making this dependent on progress in efforts to achieve greater economic convergence. It proposes to harmonize tax structures when this will further serve to reduce the flexibility of those economies which in order to boost their competitivity and performance, given their limited endowments, will need to differentiate their tax profiles, naturally under conditions of full transparency. 

Dr Sant said that the benchmarks that are being used to stabilize and run the system – which were fully endorsed in the Berèsresolution – attack only the symptoms but not the economic fundamentals that are producing this result.Dr.Sant said that the discipline being followed on the basis of the set benchmarks might be contributing further to the divergences. Partial deepening of the existing arrangements could actually serve to further widen the divergences even within a steady state, stabilized context for the eurozone as a whole.

‘For these reasons, I cannot therefore support the report.’ concluded Dr Sant.

The final vote on the resolution was 317 in favour, 254 against and 9 abstentions.Dr Sant and the whole Maltese Delegation (S&D and EPP Malta) voted against the final vote of that resolution.