Put Malta first in EU Treaty revision

The Times reported (October 24) that Prime Minister Lawrence Gonzi on Sunday played down the need for any further changes in the EU Treaty aimed at consolidating economic governance and fiscal discipline among the 27 member states, particularly within the 17-member eurozone. He said that changes should only take place if absolutely necessary.

The Prime Minister has displayed a very surprising stance at the way the debate on ratification of fresh assistance to Greece panned out- Lino Spiteri

The Prime Minister did not define what “absolutely necessary” means. He was speaking during a political interview for local consumption. He restricted himself to declaring that the government was in favour of more economic and fiscal discipline because this would consolidate the (eurozone) area and avoid a return to similar situations.

Dr Gonzi was referring to the crisis that has gripped the eurozone, surprisingly triggered by the ballooning public debt and fiscal deficit in Greece. Surprisingly because Greece is one of the smallest economies in the EU and the eurozone. That notwithstanding, the fact that it had effectively falsified its public accounts to get into the eurozone, has a massive black economy relative to GDP (massive, but slightly lower than Malta at last count, for 2010), and has so far failed to meet the stringent conditions imposed upon it to help bail it out of the crisis induced by these factors and abysmal public lack of proper governance, Greece has created turmoil in the eurozone.

Contagion aside, that was due to the fact that eurozone banks, particularly in France, hold very substantial amounts of Greek sovereign debt. That led to the stark reality that those banks will have to suffer sharp write-downs in their balance sheets if Greece is to be helped effectively not to default completely on its debts. Such consideration brought about fresh fears regarding undercapitalisation in a number of eurozone banks relative to the coming write-downs, as well as a growing movement that says the eurozone, a monetary union, cannot survive unless it also moves closer to fiscal union.

Such a development would impose stricter fiscal discipline on member countries. It would also bring about fiscal transfers towards the weaker economies, something which German voters in particular will be very unhappy with. This bundle of woes led the European Council President, among others, to propose changes in the EU Treaty.

It was that proposal which elicited caution by ’s Prime Minister. The caution falls short of outright rejection of changes. That is understandable. The Prime Minister cannot shoot from the hip. It is also understandable that the government has to consider the situation as it develops. But then, neither will it be acceptable that the Prime Minister does not, at the appropriate time, take Parliament and the Maltese people into his confidence. The appropriate time must not be equivalent to the eve of the final decision. That is not how a self-respecting democracy should work. Moreover, the government needs the power of Parliament and public opinion at his elbow.

In this regard the Prime Minister has displayed a very surprising stance at the way the debate on the ratification of fresh assistance to Greece panned out. Alfred Sant, the former Labour leader and former Prime Minister held up the debate schedule with a string of detailed questions. He was entitled to make them, otherwise Mr Speaker would surely have stopped him.

The Prime Minister, who is becoming easily irked, thought otherwise. He thundered from partisan platforms that the Labour opposition had hurt Malta’s interests. That is democratic heresy. Either MPs are free to express themselves fully, within the rules of Parliament, or they become mere rubber stamps. The Prime Minister should not expect that from his Cabinet and backbenchers, let alone the opposition.

Aside from that democratic argument, there is another factor to consider. Malta is the smallest EU member, but on important matters its vote is equal to that of the largest and mightiest members. The American State Department recognised that fact when Malta was still seeking membership of the EU. Why should anybody in Malta, particularly the Prime Minister, forget it? In fact it was one of Eddie Fenech Adami’s strongest selling points when he was propagating Malta’s accession to the EU.

It would be wrong for Malta to make an unnecessary nuisance of itself in EU negotiations. It would be at least just as wrong if it grew too hoarse to argue strongly for its interests. The UK has already made it clear – through its Prime Minister, and not its eurosceptic MPs – that it will use any discussion of a revision of the EU Treaty to further its own interests. Malta should not do otherwise.

That should not need stressing to Dr Gonzi and the caution reported by The Times on Monday surely means that. I do not at all expect Lawrence Gonzi and Malta’s negotiating team even to dream of selling Malta short. But the partisan attack on the opposition will have been noted by EU members – like the UK and Italy, among others – who will be pushing mightily to gain our support for their self-serving schemes.

There is no such thing as being Mr or Madame Nice in political or diplomatic relations. Nor can there be such a thing as saying one thing in Malta and another in foreign fora. Subject to its EU, eurozone and international responsibilities Malta comes first.

Our negotiators must not leave any doubt about that, in pushing forward the points of relevance to our island which they must be busy drawing up for the eventuality of discussions and negotiations on a revision of the EU Treaty.