We have spent weeks watching an evolving Greek tragedy, wondering whether Greece would default on its loans and whether the other members of the eurozone would eventually bail Greece out.

In the end, Greece was bailed out also with the support of the International Monetary Fund. In fact even little Malta has to play its part in this bailout; but, after all, this is what European solidarity is all about.

No one could afford to risk a default by Greece as no one could really anticipate what the consequences of such a default would be on other countries and the euro itself, let alone the world's financial markets. We simply could not have a repetition of the Lehman Brothers saga, however, at the level of a country, rather than at the level of an individual bank.

As the rescue package took shape, the markets first reacted favourably and it seemed that the issue was resolved. However, within 24 hours, the markets got jittery again, this time with a difference. The attack was not on a country but on the euro. And this is where we were a week ago. It was evident that the speculators were at it again.

They were finding it more difficult to speculate with the equity of banks, financial institutions, and other companies. So they had then turned their attention to the bonds issued by governments. When even that hole was getting plugged, they then turned their attention to the euro.

The euro has been falling in value for the last weeks. After a decade of appreciation in value against the dollar and the sterling and a period of economic and monetary stability, this was now the chance to go for the big kill, putting at risk of default other economies such as Spain and Portugal.

This forced the finance ministers of the 27 members of the European Union (referred to as Ecofin) to meet last Sunday to agree on a plan before the markets opened on Monday, that would safeguard the stability of the euro. The plan essentially consists of making available up to €750 billion to defend the currency. The International Monetary Fund shall also be participating in this plan. The agreement reached on Sunday followed a series of bilateral contacts made during last weekend apart from two conference calls between the members of the G7 (the group of what are considered as the world's leading economies).

In the end, the markets responded very positively on Monday. The answer that the governments of the EU member states wanted to give to the markets was very strong and addressed the short-term issue of speculation. However, we need to admit that some issues of a medium- to long-term nature remain open. Unless these issues are addressed the attack on the euro will resume.

These issues relate to combating speculation in the financial markets, addressing the fiscal imbalance in the eurozone countries as well as the United States and the United Kingdom, the elimination of the boom and bust cycle and the consistent application of EU rules.

However, there is one fundamental aspect that we need to recognise. The free movement of capital has made it easier for those that own capital to make a profit not through productive activities but through speculative activities that have no value added for the community.

This is not to say that we should restrict the movement of capital. The possibility for investment to move freely from one country to another has also enabled the creation of wealth in the world and achieved a better global distribution of income. What I am advocating is that we need to recognise one of the negative side effects of what would otherwise be judged as a positive development.

What are the lessons for Malta? There will be some who will be tempted to say that joining the euro was a mistake as we are having to pay for the instability in the financial markets. There is one question that needs to be asked. What would have been the effects of the credit crunch and the international recession on this country had we not joined the EU and subsequently the eurozone? The euro needs to be defended against the financial speculators around the world. We also need to defend the euro against sceptics in our country who believe that we would be better off without it. I ask these sceptics to prove their claim.

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