EU Commissioner rejects MLP's euro arguments

Joachim Almunia, the European Commissioner for Economic and Monetary Affairs, yesterday dismissed the Labour Party's arguments against the introduction of the euro in Malta in 2008.

He said that Labour leader Alfred Sant's arguments on the issue "have nothing to do with the introduction of the euro in Malta".

Mr Almunia was speaking after the signing of a partnership agreement between the Maltese government and the European Commission for the granting of funds for Malta's information campaign before the introduction of the single currency. The agreement was signed in Brussels between Prime Minister Lawrence Gonzi and Mr Almunia.

Asked to comment about his recent meeting with the Leader of the Opposition and the arguments for a postponement of the euro changeover date, Mr Almunia said he listened carefully to Dr Sant's arguments but doesn't agree with them.

"I told him (Dr Sant) that all the arguments he was making were not linked at all with the introduction of the single currency. They are other arguments that can be taken into account in the normal political debate between government and opposition but the impact of the introduction of the euro has nothing to do with the arguments that Dr Sant is bringing up.

"I am a friend of Dr Sant and have nothing against him. I can understand many of his arguments but, in this case, the introduction of the euro was not at all linked with the concerns and arguments that Dr Sant brought up during our meeting."

Following his meeting with Mr Almunia last week, Dr Sant had said there was no consensus in Malta over the date of the euro's introduction. According to Dr Sant, the MLP wants the euro to be introduced when the economy is performing at a growth rate of between three and four per cent of GDP. The agreement signed yesterday provides for financial assistance to be used by the National Euro Changeover Committee (NECC) in its campaign to provide factual information that will enhance the people's understanding of the euro and contribute towards a smooth changeover to the euro.

The financial assistance is to be specifically used in the information campaign to be unveiled by the NECC in June. The assistance includes co-financing of up to 50 per cent of the cost of the advertising campaign, the production of specific publications and the salary of five information officers and will run for a year, following which a new grant agreement for the following year will be negotiated.

Dr Gonzi called the introduction of the euro the next important step in Malta's economic development and said that the government will be boosting its efforts to make sure it reaches the demanding economic criteria needed to be able to join the euro in 2008.

"We consider the introduction of the euro as a very important target for Malta as it will make us more competitive. It is also an important economic target and achieving the criteria in itself is already an important task which we are working at. Forming part of the eurozone is the next economic development phase for our country," the Prime Minister said.

The amount of funds to be granted to Malta under this agreement is not yet defined.

Mr Almunia said the total sum for the five countries that have signed this agreement (Malta, Cyprus, Estonia, Lithuania and Slovenia) will this year reach €2 million.

"However we still need to divide that among the five member states according to specific criteria." Mr Almunia cautioned the Maltese government on how it should introduce dual pricing as part of the information campaign.

"We recommend to the future members of the eurozone to be careful because the dual display of prices is a very useful tool to inform the public opinion before the changeover but if Malta will join the eurozone on January 1, 2008 the final and irrevocable exchange rate between the Maltese currency and the euro will be established at the end of June or the beginning of July 2007. So this is a reason to be prudent."

The government has already announced it intends to introduce dual pricing from the beginning of next year.

The Prime Minister assured the Commission that the Maltese government will be introducing the measure with great caution. He told the Commissioner that the early introduction of dual pricing was to get the Maltese public used to the euro as quickly as possible to prevent abuse. Dr Gonzi said this will be done following intense discussions with all the economic operators.