PM's song and dance about the lira
Sincerely, I never thought the prime minister was in such a desperate political situation that he would do such a song and dance about Dr Alfred Sant's suggestion to stimulate the economy by readjusting the value of the Maltese lira over a period, in...
Sincerely, I never thought the prime minister was in such a desperate political situation that he would do such a song and dance about Dr Alfred Sant's suggestion to stimulate the economy by readjusting the value of the Maltese lira over a period, in order to reflect its real value.
I couldn't believe my eyes when I saw Dr Gonzi waving a Lm2 note in Dr Sant's face on Xarabank while shouting: "Do you know how much this (Lm2 note) will be worth, Dr Sant?" He kept repeating these words to try and make the greatest impact on those watching the programme.
It has become quite obvious that Dr Gonzi's song and dance in Parliament and on Xarabank did not impress Malta's economists although it might have impressed those who couldn't see through Dr Gonzi's political trick.
What the prime minister may not have realised was that when claiming that he would not take up Dr Sant's suggestion, and will stick to the present value of the lira, he was revealing one of the biggest disadvantages of EU membership, which will hit us as soon as Dr Gonzi dumps the lira and is forced to adopt the euro instead!
The reason for this is simple. While today Dr Gonzi's government has the political power - if not the economic sense - to decide, through Malta's Central Bank, what the value of Malta's currency should be in relation to other currencies, once Malta's currency becomes the euro, Dr Gonzi's government will no longer have any power to decide or influence what the value of the euro should be. He will then just be able to sit and stare, unable to do anything except to curse the day Malta was forced to dump the lira on which his or any other Maltese government would have been able to have control. And hence also control Malta's economy!
What I object to about our economists is that while they were quite ready to speak their mind about Dr Sant's suggestion and Dr Gonzi's reaction, they are keeping silent on the loss of economic control which the Maltese government will suffer once Malta adopts the euro. Some more consistency, please!