Parliamentary Secretary Tonio Fenech said that the change to the euro can give the country’s economy a number of advantages.

Speaking in Parliament during a debate on amendments to the Income Tax Act, Mr Fenech said that the euro is the second most powerful currency in the world and some say that in about five or 10 years, it may well be that it will become the most powerful currency. On an economic level, the euro will give more stability and certainty.

The parliamentary secretary said foreign investment has increased considerably in recent years. In 2004, there was foreign investment of Lm110 million, which increased to Lm240 million liri in 2005 and to Lm575 million in 2006. Mr Fenech said that the road towards joining the euro has not been an easy one, but now we are nearly at the end of the process.

There are five criteria that a country has to satisfy in order to be eligible to join the eurozone, namely exchange rate stability, a balanced budget over a business cycle, a manageable public debt, long-term price stability and a stable long-term interest rate. Mr Fenech noted that the deficit has been reduced to 2.6 per cent of the gross domestic product and thus is within the three per cent imposed by the Maastricht criteria.

Mr Fenech then focused on the Special Registration Scheme, which is giving the opportunity to individuals residing in Malta to regularise their position in respect of their holdings of eligible assets in cases where income has not been declared.

One might ask who can benefit from such a scheme, which is not open to everyone? Mr Fenech said that only those who have obtained money in a legal way may regularise their position. This includes money obtained from employment or pensions, for instance.

An important feature of the scheme is the confidentiality of the whole process. The identity of the person wishing to declare income is strictly confidential and no one can ask for such identity to be disclosed. Mr Fenech insisted that the Central Bank is autonomous from the government and thus the identity of the person regularising his or her position is not going to be divulged to the government in any way, unless the person regularising the position insists that such identity be divulged voluntarily.

Registration of currency notes is subject to a one-off fee of four per cent of the registered amount and there will be no interest during the first year of such a deposit. Such a solution was necessary in order to keep the four per cent low. The primary objective of such a scheme is to encourage people to regularise their position and the Special Registration Scheme is in effect till the end of July.

Labour Party deputy leader for parliamentary affairs Charles Mangion said that in these last 30 years, the Maltese currency has always been powerful. Economic growth has been particularly seen in three areas, namely financial services, real estate and personal services.

Although the rate of inflation seems to have stabilised, it cannot be forgotten that in previous years, the inflation rate was higher. Dr Mangion remarked that the promise made during the last budget regarding a reduction in the excessive price of medicinals has not yet come about. There needs to be special surveillance in order to ensure that there is no abuse.

Dr Mangion insisted that the water and electricity surcharge can be reduced. He said it is important to establish a plan so that in future, dependency on fossil fuels is reduced and we will be using more environmentally-friendly means.

Quoting from the Annual national report on competitiveness, Dr Mangion said that Malta ranked 19 of the European Union member states in terms of competitiveness and made the point that the elements that reduce

competitiveness are bureaucracy and inefficiency. He then focused on the transparency element, which needs to be prioritised.

Dr Mangion concluded his speech by focusing on the issue of the sustainability of the country’s finances.