Malta and Britain are "on the same wavelength" when facing the challenges of globalisation and economic reform in Europe, Prime Minister Lawrence Gonzi said yesterday after meeting Tony Blair at 10, Downing Street.

Both leaders agreed that illegal immigration had to be tackled as part of the world's response to globalisation.

The main issues discussed during yesterday's meeting were Thursday's European Union summit in London, globalisation, economic reform and a possible budget deal in the EU, the Commonwealth summit to be held in Malta in November and illegal immigration.

Mr Blair told the press that Malta and Britain were "strong partners in both the European Union and the Commonwealth" and he looked forward to working with Dr Gonzi at Thursday's EU summit - which will discuss globalisation and European economic reform - and at the Commonwealth summit.

Dr Gonzi described the meeting with Mr Blair as "very good" and a good opportunity to strengthen an already very strong relationship between Malta and the UK.

"It is a relationship that goes back many years and which has been made even stronger by Malta's EU membership," the Prime Minister said.

"We want Europe to grow, to move forward, to modernise, to respond to globalisation. Malta, the smallest EU member, is willing to contribute to try and achieve these goals. The Commonwealth summit is an opportunity for us to bring different countries together under the Networking The Commonwealth For Development theme to eradicate poverty. I salute the United Kingdom for its initiatives over the past month to try and achieve this aim," Dr Gonzi said.

Asked by The Times whether illegal immigration will be on the agenda of next month's Commonwealth summit and whether the Maltese government expressed satisfaction during the meeting with the work of the British presidency in tackling this problem, Mr Blair replied: "We did discuss illegal immigration. It is a major problem for Malta and for other EU countries. It is a problem for all the EU and all the world.

"As part of globalisation we are getting vast numbers of economic migrants who naturally want to search for a better life. That ends up as a major problem for the host country. We discussed how we can get a more rational system in place so that countries are not expected to do more than they can.

"At some point we have to go back internationally and to the rules governing this process to see how they can be made more consistent with the modern world in which we live and work rather than rules which were formulated half a century ago."

Mr Blair said he was delighted that Malta was hosting the Commonwealth summit which he was looking forward to attending, adding that he knew such summits "place quite a burden on the host country".

On how confident he was of reaching a deal on the future budget of the European Union, Mr Blair said: "This is a big challenge. It must be part of a deal to move Europe forward along the path of economic reform. We face enormous challenges from China, India, Japan and the United States. The economies of Europe have to respond to globalisation."

Dr Gonzi said it was important for the EU to respond correctly to the challenge of globalisation and for European economies to be flexible to deal with new realities. He said both Britain and Malta wanted to continue opting out of the EU's working time directive - and this was an example of economic flexibility. He also emphasised that Malta and Britain had the same expectations for Thursday's London EU summit.

On whether a consensus will emerge at Thursday's EU summit or whether there will be the usual divisions between, for example, France and Germany on one side and UK and others, Dr Gonzi said: "Political realities are what they are but the final objective is common, everyone has a common objective: we all want the European economy to move forward."

Dr Gonzi said the Commonwealth had an important role in tackling the problem of poverty, illegal immigration and globalisation, which were all connected, and he said he made this point to Mr Blair, who agreed with him.

He praised the British EU presidency for creating an awareness about the problem of illegal immigration.

He pointed out that the last time a British Prime Minister had visited Malta was during the Second World War when Winston Curchill had visited, so Mr Blair's visit in November was highly significant.

Later in the day Dr Gonzi met Foreign Secretary Jack Straw, Secretary of State for Work and Pensions David Blunkett and Home Secretary Charles Clarke. During his meeting with the Foreign Secretary, Dr Gonzi was accompanied by Foreign Minister Michael Frendo.

The Maltese delegation was hosted to lunch by Geoffrey Hoon, Leader of the House of Commons.

After the meeting between Dr Gonzi and Mr Clarke, a press statement was issued by the two sides which said that dealing with migration flows from North Africa to Europe "is a shared concern and a priority for the whole EU not just for the EU border states. We support the Commission in their ongoing negotiations on readmission agreements and look forward to making real progress on tackling illegal immigration with EU partners over the next few months".

During Dr Gonzi's meeting with Mr Blair, Kate Gonzi met Cherie Blair to discuss the spouses' programme at the Commonwealth summit.

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