The informal summit of EU leaders which was held last week ended up devoting most of its attention to the perilous state of finances in Greece. This should serve as an eye opener for all concerned. Just as individuals, families and private companies need to live within their means if they are to be sustainable, equally nations cannot simply imagine that they can create an impression of wellbeing by not addressing the key issues and challenges.

Last week the influential magazine The Economist described Greece as skidding towards disaster and urged the country to bring in the International Monetary Fund to come up with the required deep budget cuts and structural reforms that are required to place the economy back on a sound footing. The IMF can do just that without even bothering about whether it is popular or not. Other economists have over the past weeks been drawing up comparisons between Greece and Dubai, apart from indicating that there are other areas of trouble that we need to be aware of – countries such as Spain, Portugal, Italy and Ireland.

The informal summit of EU leaders extended solidarity towards Greece but did not provide for any direct financial bail out, not on a collective basis and not even on the basis of grants from any individual European Union country. Greece was reading well the writing on the wall and refrained itself from asking for any such line of credit. That is how it should be, since ultimately the European rules on deficit control and good governance that is measured objectively against accepted indicators are there to be observed not only in the interest of each sovereign State but also in the interest of regional stability.

Last year the Greek Budget deficit shot up to 12.7 per cent, over four times the three per cent European ceiling. Greece now needs to bring that deficit down to the permitted level by 2012. Various austerity measures including freezing of all salaries in the public sector, doing away with bonuses, apart from increasing the pensionable age and increasing taxation on fuel, tobacco products, alcohol and property have been announced. These measures have already led to widespread protests and unrest.

The European Union leaders meeting in Brussels emphasised the importance of every country abiding by the regulations on controlling the deficit if all of the European Union wants to ensure economic stability as well as growth. The Union will itself closely monitor what Greece will be doing to affirm its own credibility, not least by bringing down the deficit already by four per cent throughout this year. While the European Union will draw on the expertise of the International Monetary Fund, it has its own institutions including the European Central Bank not to have to delegate its monitoring and in a sense enforcement role to anyone else.

One can only augur that the determination being shown by the Government of Greece apart from regular monitoring by the European institutions will avoid what was already evolving as an unfortunate Greek tragedy.

Malta and the rest of Europe does well to learn from what has happened in Greece. We need to appreciate that growth cannot be taken for granted, nor does it come about by coincidence or without vision, planning and wherever necessary even sacrifice. While various indicators point out to a recovery in Malta as from the second half of the year onwards, we cannot express enough the need to make such statements with utmost caution.

How has Malta managed to move ahead despite all our difficulties that do have an impact on our families? The truth is that we had the courage to make the right decisions at the right time. Such decisions included joining the European Union, becoming part of the Eurozone, and being able to take the bull by the horns on such various issues, not least a number of difficult and sensitive sectors. We have over the past years dismantled monopolies, created new growth areas as with financial services, did not shy away from the challenge of dealing with the impact of higher fuel prices on our utility bills, and attracted foreign investment to see us being able to handle more projects than ever before.