In one sentence of his speech last Wednesday, Labour Party leader Alfred Sant made a very important announcement. Quoting from his speech, he said: “Apart from this, our plan is to take full action to ensure that, in the coming months and years, the introduction of the euro on 1 January 2008, will not be used to continue inflating the cost of living.”

In these few words, the Labour Party has admitted a number of things. First, the party has agreed that Malta needs to adopt the euro. Second, it has accepted the government’s target of 1 January 2008, subject to approval from the EU. Third, it has indirectly acknowledged that the government’s efforts to reduce the deficit, control public debt and maintain a stable exchange rate have so far proved successful. These are three of the four criteria necessary for membership of the European Union. Fourth, it has indirectly also stated that it will not use the euro to gain political mileage.

Now, all this comes out in one short sentence in Dr Alfred Sant’s two-hour reaction to the budget. For many on the government bench it was a complete surprise. On Friday, Prime Minister Lawrence Gonzi said the Opposition Leader’s comment had caused a few raised eyebrows – and not necessarily on his side of the House. Whether this is true or not has little effect on the outcome of Dr Sant’s statement: the Labour Party accepts that membership of the eurozone is important for Malta.

What is the significance of this U-turn – to quote Dr Gonzi – for the country, for the government and for the Labour Party?

First and foremost, it signals the end of what could have become a very dirty war of words between the two political parties. By eliminating politics from the issue, the Labour Party has given the country one headache less to worry about. It will give people the opportunity to listen carefully to what the National Euro Changeover Committee has to say, without having to consider the views of the political parties on the matter. Basically, the NECC can now get on with its work without political interference. The only risk for the country now is the threat from inflation.

The Labour Party’s change of mind on the euro has given the government, as the Prime Minister said on Friday, “the best certificate it could have ever been given by the Opposition”.

No wonder Dr Gonzi was smiling. After three years of harsh criticism that the government’s finances were in shambles, the Opposition Leader gave Dr Gonzi one massive recommendation – and presumably, he was fully aware of what he was doing.

There is a big contradiction here. For months, Labour MPs have been taking the government to task over the deficit, the rate of economic growth and so on. Now, with Dr Sant’s statement – which emphasises 1 January 2008 as the date of euro entry – the party (inadvertently?) gives the thumbs up to the government’s efforts to bring the country’s finances in shape. Was this a blunder?

This brings us to the impact of this U-turn on the Labour Party and its supporters. There are two ways of looking at the situation. Either the Labour Party will be seen as acting maturely and taking a decision that will be of benefit to the country in the years to come, or Dr Sant’s statement will be seen as a last-ditch attempt to convince floating voters that he knows what he is doing and to vote Labour.

Whether people will interpret this U-turn as a sign of weakness is hard to say, but there will be those who will question why the Labour Party had to take such a negative approach to the euro issue, only to backtrack a few months later.

Dr Sant’s statement in parliament last Wednesday carries more weight (and importance) than the remainder of what he had to say. Are we about to see Labour changing tactics with less than 18 months to go before an election?