Movement welcomes decision on euro

In a press statement issued on May 16, the European Movement (Malta) welcomed the European Commission's decision to recommend that Malta be allowed to adopt the euro from January 1, 2008.

The movement described this as a historic step and one that further deepens Malta's integration in the EU. The final decision will be taken by ECOFIN in July. The adoption of the euro will certainly enhance Malta's international image and credibility, strengthening its potential for increased investment and jobs.

Membership of EMU (European Monetary Union) and the adoption of the euro constrain present and future governments to make price stability their foremost priority.

It obliges them to maintain sound public finances so that public spending does not exceed revenue by more than three per cent of GDP and total public debt must be kept at around 60 per cent of GDP - or receding towards that figure.

These criteria require the Maltese authorities to give continuous attention to public spending and to cut down on waste. The long-term effects of this would be to further discourage the already declining culture of profligacy. Taxpayers ought to welcome this additional discipline.

In brief, membership of EMU, accompanied by flanking policies to increase Malta's competitiveness, strengthen Malta's economic and social resilience to external shock. A strong economy is the cornerstone of a more just society.

Malta's membership of EMU has also required the strengthening of the independence of the Central Bank, giving it a unique role in determining monetary policy, which has become less open than before to the swings of the local political pendulum. All these have a positive longer-term effect on people's welfare.

The big challenge that remains to be overcome is the switchover itself, when the Maltese people exchange their Maltese liri for the new currency. The movement expressed its belief that the conditions have been established for a smooth changeover, given the very meticulous preparations made by the Central Bank and the National Euro Changeover Committee.

It also acknowledged the very co-operative approach adopted by the business community and its organisations, and most of the other social partners. The movement augured that this broad consensual approach be maintained to the end to ensure the least inconvenience for Maltese citizens.

The movement also welcomed the political maturity shown so far by all sides and augured that this spirit be maintained strongly in the next crucial stages.