Definitely in

Last Friday the European Council, which brings together the heads of government of the 27 member states, agreed on the entry of Cyprus and Malta in the eurozone. This means that on July 10, at a meeting of the Economics and Finance Ministers, the decision will be finally sealed. The European Parliament had already approved a resolution in favour by an overwhelming majority.

The final, countdown for the introduction of the euro in Malta has begun. This event is yet another success story for Malta, one, which if we succeed in exploiting to the full - and perhaps more diligently and gracefully than we did with the posters of President Sarkozy - we could help give the economy yet another boost and enhance the people's welfare. The introduction of the euro is also a historic step.

Economic development has no other aim than to improve the quality of life of all the people.

For the pundits who are always ready to fist their eyes on the negative side of things, the EU was not lenient towards Malta in accepting its entry in the eurozone. Malta went through the same tests as most other countries, if not more.

In reaching its positive conclusion on Malta, EU leaders considered that the Council had abrogated on June 5 its 2004 decision on the existence of an excessive deficit in Malta. After peaking at around 10 per cent of Gross Domestic Product in 2003, the budget deficit decreased significantly under Malta's fiscal consolidation programme, reaching 2.6 per cent in 2006.

The general government debt-to-GDP ratio is above the EU's 60 per cent reference value but has been on a declining path since 2005 and is expected to continue to decline further in 2007 to around 66 per cent of GDP. The average HICP inflation rate in Malta in the year ending March 2007 stood at 2.2 per cent, which is below the reference value for the price stability criterion. The 12-month average inflation rate has been at or below the reference value since July 2005, except for the period from May to October 2006. Malta's price performance is assessed to be sustainable.

Malta has participated in ERM II since May 2005. In the two-year period ending on April 26, 2007, the Maltese lira (MTL) has not been subject to severe tensions and, since it joined the ERM II, Malta has not devalued on its own initiative the MLT bilateral central rate against the euro.

In the year ending last March, the long-term interest rate in Malta was, on average, 4.3 per cent, which is below the reference value. Other relevant factors to which the treaty refers, such as the integration of markets or the situation and development of the current account, confirm that Malta has achieved a high degree of sustainable convergence.

National legislation, including the statutes of its national central bank, are compatible with the treaty and the ESCB statute requirements for stage three of economic and monetary union.

One hopes that the Maltese authorities will maintain the steady course they have maintained so far and continue to attack the root cause of waste. There are plenty of places were such savings could be used: health, the environment, education and a smaller and more efficient public service.