Following yesterday’s meeting of the EU’s Economic and Financial Affairs (ECOFIN) Council, Prime Minister Lawrence Gonzi expressed confidence that Malta will be adopting Europe’s single currency on 1 January 2008 as planned.
Speaking to journalists in the wake of the meeting, Dr Gonzi, who represented Malta in his capacity as finance minister, said all that is left is for Malta to review its inflation figures for December and January before filing its formal application to enter the eurozone.
“We are confident that these (inflation figures) will give us the green light to submit the application,” Dow Jones Newswires quotes Dr Gonzi as informing journalists in Brussels.
Malta’s inflation rate had been a persistent thorn in the side of the country’s euro adoption bid, with the last convergence report compiled by the European Central Bank highlighting the hurdle.
Between November 2005 and October 2006, the closing date for data to be used in the report’s compilation, Malta’s 12-month moving inflation rate average had stood at 3.1 per cent – well above the reference value stipulated for meeting the essential inflation criterion.
The reference value is calculated by taking the average of the three best-performing eurozone countries and adding 1.5 per cent to that average.
By November, however, Malta’s 12-month moving average had fallen to 2.8 per cent, and fell further to 2.6 per cent in December – placing Malta well within the reference value, which had stood at 2.9 per cent in November and December.
If the downward trend persists, January’s moving average should be even lower and open the door for Malta to formally apply for eurozone membership.
Malta’s formal application should be submitted some time in March in order for the European Commission to draft its final convergence report on Malta in June, when the final irrevocable exchange rate between the Maltese lira and the euro will be set and when the obligatory dual pricing period will begin.
German finance minister and ECOFIN president Peer Steinbrück, also speaking on the sidelines of yesterday’s meeting, commented that both Malta and Cyprus could be expected to submit their formal applications within the coming weeks.