This was said in a Department of Information statement in reaction to reports issued by the European Commission and the ECB in respect of Malta’s capability to assume the responsibilities set out in the acquis for future participation in Economic and Monetary Union (EMU).

The statement said that the government knows that the Central Bank of Malta Act is not yet fully compatible with article 109 of the Treaty and the ESCB/ECB Statute. The government would like to clarify that the remaining issues relate to Malta’s adoption of the Euro, and therefore the necessary amendments will be introduced during the final stages of Malta’s participation in EMU.

With respect to the other aspects relating to Malta’s lack of convergence mentioned in the reports, the government reiterated its declared intention to adhere to the commitments outlined in the Convergence Programme 2004-2007 which it submitted to the commission in May 2004. Subsequent to that, the government will, next month, present an updated version to the EU.

A major feature of this programme is the correction of the fiscal deficit, the DOI said. While government noted that significant progress is being achieved, the fact remains that administrative reform, cost-

containment programmes and budgetary consolidation mechanisms need to become more ingrained as ongoing processes within the public service and the wider public sector.

It also needs to be fully embraced by all the social partners who have a significant contribution to make in achieving these targets, especially through the Social Pact. Indeed, as the Prime Minister and Finance Minister continually stress, the placing of government finances on a sound footing is a national project from which the whole nation and its citizens are bound to benefit.