On 27 February, Malta submitted its application to join the eurozone. Prime Minister Lawrence Gonzi, on behalf of the people of Malta, requested the preparation of a convergence report to determine whether our country can adopt the euro as its currency from 1 January 2008.

With this formal application, a process has been set in motion, during which the European Commission and the European Central Bank will report on the progress made by Malta in reaching the Maastricht criteria for convergence. These criteria are necessary in order to adopt the euro.

The five tests, or goals, that our country must reach before we are allowed to introduce the euro are:

• Price stability;

• Controlled government deficit;

• Controlled government debt;

• Exchange rate stability; and

• Long-term interest rates.

These tests are listed in the treaty establishing the European Community. By reaching these goals, Malta would be in gear for a stable and prosperous economy and on the right track for further economic growth.

Malta’s criteria to join the eurozone are: reaching an inflation rate of 0.3 per cent or below; government’s deficit should not exceed three per cent of the gross domestic product – GDP, debt must not exceed 60 per cent of the GDP, the exchange value of the lira must stay within the normal fluctuation bands against the euro for a period of two years and long-term interest rates must not diverge more than two per cent from the average of the best three performing member states.

When we take a quick look at the results achieved by the Nationalist Party in government in the economic sector, we will notice that these results are guiding us in the right path to join the eurozone on the coming New Year’s Day.

One must appreciate the wise and long-term projection envisioned by the Government’s economic policy for Malta that has managed to:

•Keep the inflation rate below the established threshold – Malta’s inflation rate is 0.3 per cent;

•Reduce the deficit in 2006 to 2.6 per cent, and it is still on the decline;

•Since the Maltese lira is pegged to the euro, Malta satisfies the criteria of having its currency within the fluctuation bands against the euro for two years;

•Malta also satisfies the interest rate criteria.

The other criteria states that government’s debt must not exceed 60 per cent of GDP. Though still to be reached, the giant leaps taken not only to control the debt but also to reduce it from 74.2 per cent of GDP in 2005 to 68.3 per cent in 2006 is evidence enough that something is being done to reduce it, and a country may be admitted on this basis.

The Maltese government projection of reaching the 60 per cent set target should be achieved in 2009. This was also confirmed lately at the ECOFIN meeting held in Brussels, at which Malta was removed from the excess deficit procedure, a procedure that is imposed on member states that have a high deficit.

These results have produced foreign investors with a stimulus to invest their money in our country. This is proved by the results achieved last year, that show a record level of foreign investment in our country. Entrepreneurs that believe in the potential of Maltese workers brought over the sum of Lm500 million to our country. Quite a contrast compared to the low investment attracted by the Labour administration during its 22 months in office.

Our country is achieving huge results in the economic sector. This is all the result of hard work not only in the government’s ranks but also in society in general. These results build confidence and put this country in the limelight to attract further investment.

This will be boosted further with the introduction of the single European currency. The euro has provided an important number of benefits, notably to citizens and enterprises. While for citizens, price comparison and travelling will become easier, enterprises can reap the full benefits of the European Union’s

single market.

Since the euro is a major international currency, both savers and investors benefit from increased opportunities stemming from a larger financial market. Gradually, the euro is also playing a more important role in international trade and as a reserve currency.

With the contribution and investment in all sectors that make up our society, we are achieving. Every Maltese man and woman, old and young, must be proud of these achievements and must set greater goals for our country.

With a common commitment, we will succeed in making our country a magnet for foreign investment and harvest our dreams of opening out for further economic growth.

David Casa is a Nationalist MEP

www.davidcasa.eu

[email protected]