Malta is not against limited change to Lisbon Treaty – PM

Prime Minister Lawrence Gonzi told Parliament yesterday that in principle Malta was not against a limited change in the European Treaty if this served to a have stronger guardian of the parameters of the European Financial Stability Fund (EFSF). However, he declared that Malta would reserve its position if this treaty was extended further.

Replying to questions by the Leader of the Opposition Joseph Muscat after making a statement on Sunday’s EU summit, Dr Gonzi said Malta’s attitude was a positive one but there were other parameters one had to respect.

Malta had not changed its opposition to fiscal federalism but had to be sure that there were systems in place that led to more economic growth. Malta favoured economic growth because it strengthened the single European market which was Malta’s main market. One had to be careful on the issue of taxation policy

He acknowledged that the current situation in the eurozone was serious and one of concern because it could leave an impact not only on member states but also on other countries. He called for a stronger Europe in economic and political terms and also as a main player in modern developments and a strategic partner in the Mediterranean, the Middle East and the Arab world.

Dr Gonzi said that the proposal for a limited change to the Lisbon Treaty emanated from every EU country’s wish to have stronger instruments giving more powers to the European Commission as guardian of the Stability Pact to intervene as early as possible when member states strayed from the obligations of the pact and put the European economy in danger.

Malta agreed to the Stability Pact, which aimed at curbing deficits below three per cent of the GDP. Malta’s target had been to balance its budget by 2010 but had to revise its position because of the international recession. However, that was still Malta’s ambition.

The Prime Minister said that he could not say whether changes to the Lisbon Treaty required approval through a referendum because the extent of the changes was not yet known. There were proposals, however, which were known already and which did not require any amendment to the Lisbon treaty.

During the summit, he had argued that the focus had to be on economic growth and increased job opportunities. He called for solutions which did not require treaty changes. It was not in the EU’s interest to go through the whole referendum process if this was not absolutely necessary.

Dr Gonzi did not want to enter into detail on Germany’s position. Like Malta, Germany looked at the current situation from two aspects – that of addressing the crisis and finding solutions so that this situation would not be repeated. Greece was still in substantial difficulties but improvement had been registered as regards Ireland and Portugal. The aim was to find a comprehensive and complete solution.

Dr Gonzi also spoke of the participation of the IMF which, together with the European Commission and the European Central Bank, was a member of the troika monitoring the implementation of the Greek austerity measures.

Technical meetings were under way including methods on how to recapitalise banks enabling them to curtail financial turmoil and installing a strong firewall to stop contagion. Dr Gonzi said this would send the message to the financial markets that no country would default. British Prime Minister David Cameron called this strategy “the big bazooka solution”.

The final aim was find long-term solutions and stabilise the financial markets. Different governments, including Italy, had taken strong austerity measures.

The Prime Minister also referred to Commissioner Barroso’s detailed presentation on competitiveness and micro business. Micro businesses had to have very good incentives to give maximum contribution to economic growth. Malta already had the Small Business Act which simplified things for micro businesses. Malta looked with optimism to economic growth within the EU.

Dr Gonzi said he hoped that during tomorrow’s continuation of the summit, the EU heads would be presented with a package of feasible proposals.