Malta’s euro plans and Germany’s programme during its presidency of the European Union were discussed in a meeting between Prime Minister Lawrence Gonzi and German Chancellor Angela Merkel yesterday morning.

Germany takes over the EU Presidency for six months starting on 1 January 2007.

Talks on Malta’s plans to join the euro on 1 January 2008 were of particular importance in the light of yesterday’s news that Malta’s rate of inflation in November was 2.8 per cent.

This means that for the first time in months, the rate of inflation is below the reference value needed to ensure that Malta adopts the euro currency according to plan. A stable, low rate of inflation is a requirement for eurozone membership.

The reference value is the average inflation rate of the best three performing countries plus 1.5 per cent. Based on figures released by Eurostat yesterday, the reference value is 2.83 per cent.

Speaking to journalists at the end of the European Council summit in Brussels yesterday afternoon, Dr Gonzi said the changeover to the euro currency would be the government’s main target next year.

“Our plan to adopt the euro was one of the topics discussed in the meeting I had this morning with the German Chancellor. I told her that we intend to meet the criteria necessary early next year during the German presidency of the European Union and her reply to this was very positive,” Dr Gonzi said.

The Prime Minister said he was optimistic, yet cautious, that Malta would manage to sustain a low rate of inflation and he insisted that yesterday’s monthly inflation figures were in line with government’s predictions.

“This positive result confirms that the country is moving forward and that our economy is one the right track. The euro will help to make us more competitive,” DrGonzi added.

“It is not enough to achieve these targets… this is not an attempt at passing an exam. These efforts have to be sustained over the coming months.”

Dr Gonzi said the two leaders discussed the issue of illegal immigration and he said he asked the German presidency to continue giving it priority.

Talking about the summit’s conclusions in general, Dr Gonzi said it was clear that the EU was taking the matter very seriously and he was particularly pleased that after a year of talks the subject was being addressed at the highest level even though there was still a lot to do.

“Illegal immigration is a European Union problem that requires a global solution. However, we also agree that the EU must continue to maintain dialogue with transition countries and countries of origin.”

Malta is also supporting the idea of a summit between the European Union and North African countries.

Replying to a question on the frozen EU Constitution, Dr Gonzi said that the outcome of various consultation meetings would be discussed in the coming months.

Dr Gonzi reiterated Malta’s position that it had agreed on a package that had been accepted by all the EU member states.

The Prime Minister said Malta was not against “changes to its form so long as the substance agreed upon remained the same”.

Addressing the subject of enlargement, foreign minister Michael Frendo said that what had been a proposed was acceptable to Malta.

He said the government believed the EU should maintain an open door policy to new members so long as they meet the conditions of membership.

Dr Frendo said that Malta was still in favour of Turkey joining the European Union however it had to honour its agreement to open its ports to Cyprus.

Concluding, Dr Gonzi said it was important to mention that next year will be the 50th anniversary of the signing of the Treaty of Rome and how this historic event had led to many changes in Europe, especially the demise of the Iron Curtain.

“These celebrations will be of particular significance for Chancellor Merkel because she was born and lived behind the Iron Curtain and that the celebrations will be held during the German presidency.”