And so the lobbying begins with German Chancellor Angela Merkel drumming the beat, calling for the setup of a European Monetary Fund.

However, it is not that straightforward. Some say that Europe is not ready for another Lisbon Treaty like struggle, while others say that the EMF should not be introduced and that budgetary rules should be strengthened with the help of stringent supervisory mechanisms.

The latter statement was made by Jurgen Stark, Germany’s own representative on the European Central Bank’s executive board. The ECB itself later issued a statement in which it emphasised that the views were purely personal and did not represent the stance of the Bank.

This all indicates that the German proposal is rapidly gaining in popularity, despite the major objections by France. To put this into context, France believes that the EU is not ready for any more struggles and shudders, similar to when the EU decided to ratify the Lisbon Treaty. Mr Sarkozy believes that while the plan is a good one, it is one which should be implemented over the long term and not the short term.

Malta, so far, is keeping its cards close to its chest. The European Commission has also gone on record saying that it will be speaking to individual eurozone members for feedback on the EMF proposal. It believes that it will have completed its round robin of talks by July. However, one can bet their last cent that the matter will come up for discussion in the upcoming end of March summit in Brussels.

Malta has a choice to make. There are those who believe that struggling nations such as Greece should be given financial aid as they are ‘doing their bit’. Others believe that while support is due, struggling economies must tighten the belt and implement austerity measures.

Re-negotiation of the Maastricht Treaty could open a huge can of worms. At present, the treaty does not allow for bailouts, but if it is re-negotiated, it could be completely rewritten, something nobody wants to see. The crux here is the retention of the Maastricht criteria and is paramount. The three per cent threshold for deficit as a percentage of GDP, deemed optimum for sustainable growth, should not be touched. The only areas which do need changing are those which would allow the EMF to function. This would obviously include redesign of the clause which does not allow financial bailouts as well as the parameters through which the EMF can punish repeat offenders such as Greece. The current tools which are being offered to the EMF are to prevent Eurozone members from availing themselves of cohesion funds, which are still unofficially used by ‘developing’ members as a means of subsidy. Other measures include suspension from the eurozone and the daddy of them all, not being allowed to vote in EU council meetings.

The measures are tough and they will serve as a good deterrent in the fight against dodgy financial reporting. It is clear that the euro cannot afford another shock to the system as it received when Greece announced that its deficit had ballooned to 12.7 per cent. The declarations from Portugal, Ireland and Spain of their deficits did not help matters either. It is also interesting to note that the EMF would also be able to intervene in cases where there is habitual laxness, such as the Italian economy. Whatever the case may be, Malta prides itself on its sound finances, a mission which has been in progress since our first application to join the European Union. In any future negotiations, we must point to our record and join forces with other countries that believe in austerity and sound finances. Make no mistake, member states will have to contribute to the fund, but past performance should, in this case, be used to settle benchmarks for future contributions. In other words, if countries are sound, they should not be expected to pile in the bulk of the funding.