Call for consumer protection

A report approved yesterday by the Economic and Monetary Affairs Committee of the European Parliament stresses the need for member states aspiring to adopt the euro to place consumer protection as one of their top priorities.

The report, which is expected to be discussed and voted upon by Parliament's plenary session later on this month, asks member states joining the euro to pay particular attention to consumer protection during the changeover phase, with mandatory dual pricing for a sufficiently long period of time and publicity campaigns encouraging citizens to shop around to avoid unjustified price increases.

On the other hand MEPs made it clear that new entrants should rigorously satisfy all the entry criteria before accession and that there should be no exceptions.

The report, drawn up by German MEP Werner Langen, warns that premature accession to the euro zone might lead to unexpected developments in the economic convergence process, such as undervalued or overvalued exchange rates and difficulties in achieving balanced payment accounts. This would render economic adjustment more difficult.

The report also warned that the long term stability of the euro zone should also be assessed in terms of its capacity to absorb new entrants. This implies that the enlargement of the euro zone must not undermine the strengthening of economic governance within the zone, which is required in any case.

In the light of what happened in other countries such as Greece, MEPs stressed that the judgments on whether a particular country meets the inflation and interest rate criteria should be based on data provided by the European Central Bank. At the same time, MEP called for a clarification on the inflation criteria, which are proving to be a problem for the new member states including Malta especially in view of the high oil prices and fast growing economies.

The current inflation criterion is based on the inflation rates of the three best performing member states in the eurozone. The report states that when the final evaluation by the Commission is made, "it is important to take into account the view that fast-growing economies catching up with larger economies will inevitably have higher inflation rates during this transition."

Malta currently is just within the current inflation criteria. The final decision on Malta's entry will be taken next year and the inflation rate then will be taken into consideration.

During the debate, the committee also adopted an amendment tabled by Labour MEP Joseph Muscat calling upon aspirant eurozone members to be as transparent as possible in this process and to make available all related studies and reports on the impact of adopting the euro.