Euro crisis - Fenech wants 'fairness' for countries that follow the rules, like Malta
Finance Minister Tonio Fenech has said that while Malta understands the basic thrust of what Germany and France want to achieve in the area of greater economic integration, eurozone member states that act responsibly should not have the same conditions imposed on them as those who do not.
In an interview with The Times Business ahead of today’s crucial EU summit on the eurozone crisis Mr Fenech said:
“If a country is within the three per cent GDP deficit threshold or close to the 60 per cent debt ratio it’s not the same as a country which is nine per cent and 120 per cent and you can’t adopt the same method of intervention in the two cases because that is unfair.
“If a euro member state is acting responsibly it should be given full flexibility with no intervention. But if a country is beyond that then I’m sorry that country has to pull its socks up and politicians have to assume that responsibility.
“We cannot deny the right of sovereignty, we are a union of states, unless there is an open discussion whether we want a federal Europe, but that’s a completely different discussion. There is no such discussion on the table.”
Mr Fenech said that in an emergency situation a eurozone member state which has blatantly ignored its responsibilities has to be brought into line and that country “as what happened with Greece” has to act.
He downplayed the possibility of a two tier Europe with Germany and some other northern states in a core eurozone and other countries out of it.
“I don’t believe that will happen and it is in our interest to remain in the euro. The discipline mechanism will change. National governments will no longer only be responsible to their Parliament and electorate but also to the other countries sharing the euro,” he said.
Mr Fenech said the markets were “obviously” expecting solutions to be found at today’s summit. “There are agreements which have been reached which are being implemented but that implementation needs to be speeded up to restore stability to the European economy,” he said.
Asked whether the government was making contingency plans for the possible break-up of the eurozone Mr Fenech said: “I think it is wrong to start debating the break-up of the currency. Such talk causes damage. The impact on the world economy and the European project as a whole of such a break-up would be so large that I am sure every EU member state is committed to ensure that the euro does not fail.”
He said the fact that Europe took long to implement some of the agreed upon measures to solve its debt crisis caused markets to be jittery.
“The markets expect measures to be implemented as soon as possible. We have taken some important decisions but sometimes the problem is of a technical nature, such as how the EFSF will operate,” he said.
Mr Fenech said the French proposal for the European Financial Stability Fund to be given a banking licence, thus making it a real financial institution was “very interesting”. He said Europe needs an institution similar to the IMF “in order to be able to act”.
Mr Fenech said he expects today’s EU summit to provide a road map for recovery “not the tools themselves”.
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Lawrence Fenech
Dec 9th 2011, 11:56
Issa sur fenech meta nerghu naqilbu ghal-lira maltija nisperaw li ikolna exchange rate tajba tal-famuza Euro.
John Azzopoardi
Dec 9th 2011, 11:35
malta is always told what Europe wants and Malta dutifully complies. WE are not the UK. Even Italy is now complying to big brother in the EU. Time has come to start standing up to the EU bureacrates. Boroso was right this time to say if there are changes they have to be approved by all EU countries. Germany and France are taking advantage of the current economic sitaution to advance their cause in the name of democracy. DEMOCRACY IS AT STAKE PEOPLE IF WE ARE NOT CAREFUL.
james cairns
Dec 10th 2011, 20:39
Yes, I couldn't agree more. But the real problem is the EUSSR aren't very keen on democracy! Allowing ordinary people to have a say in their future tends to mess up the eurocrats neatly laid plans.
Mr C Camilleri
Dec 9th 2011, 09:51
Oh ... so this country is acting responsibly ? Where ? Only by word in the media i guess.
Got used to only words and no results. Pull your socks up and get a new pair of running shoes. This country has a long run before you can call it a responsible country. Thanks to our leaders of course !
Darren Vassallo
Dec 9th 2011, 09:40
HEHE LIKE MALTA!! JOKE OF THE YEAR
Mark. Galea
Dec 9th 2011, 09:07
Only PL can save us ... by getting us out of the EU in time ... if I remember right, PL was always against EU, so now PL has a chance to put it in the next electoral manifest ...
Mr Peter Korsten
Dec 9th 2011, 01:19
Act responsibly? Would you call raking up a 12% deficit, so that in the next years you match most of the Eurozone criteria, responsible? Would you call a 70% public debt ratio responsible? The minister has funny ideas about what responsibility means.
joseph engerer
Dec 8th 2011, 20:38
the days of a smiling minister carrying a briefcase once a year,otherwise known as the budget,are numbered very shortly there will be some Teutonic discipline spreading through the Eurozone and that is not a bad thing. the days where politicians put themselves before their country at a deep cost to everyone will be minimized. Like the Phoenix Germany rose up to the challenge and now is leading and will help Europe through this period .
mark borg
Dec 8th 2011, 18:32
Dear Minister we are reaping the joys of EU and it useless crying over spilt milk now, or begging them to be treated different than the other irresponsible countries...first of all your govt was always irresponsible with our money (as the deficit consider our population and side is still huge) and secondly ....like we always argued ....once inside we have to just obey and tell them YES SIR to whatever pleases the real players of this new SOVIET UNION ,from the joys of illegal immigrants to whatever law they would need to enforce .Now let us all pray to god the one fiscal system would not be part of this new treaty, as this would mean one huge burden to be carried by us taxpayers not to mention the scores of foreign entities in Malta due to the current tax jurisdiction ! Which would most probably pack their bags once this would be implemented!!
Mario Busuttil
Dec 9th 2011, 07:55
If Malta was irresponsable with people 's money,than we are like Greece ,Italy ,Spain, Portugal and Ireland,,,sure we have our deficit too but in control my friend,and remember money was spent in Big projects so they aren't any waste...major roads ,Mater Dei,Dellimara Power station ,MIA,IT and so on....
Tony Borg
Dec 9th 2011, 09:32
Mr. Busuttil, please refrain from what you said. MIA is privatized sold very cheap just MMBank. Another blow will soon be the New Extension of Delimara and the Valletta Gate i should say the New parlaiment house for 12Million without a Tender. Is that your kind of deficit under Control??
Carmel Cilia
Dec 8th 2011, 17:48
Mr. Fenech insists here but when they go to these meetings in Brussels they just go there and listen. I have todate never heard of any suggestions made by Malta in these Brussels meetings which were implemented. Mr. Fenech forgot that some time ago he went to ask for a collateral agreement on our part of the bail out for Greece. Sorry to say he did not have the guts to face the other members and came back empty handed.
As for the 60 % debt of ourGDP he should be reminded that actually the debt owned by the government together with all the guarantees it owns our Country is nearer the 90% of our G.P.D. That is why our finance minister is worried because he knows the game is up now.
julian falzon
Dec 8th 2011, 19:11
Carmel, do you honestly think that a leader a country the size of a local council and which is of little importance is really going to go to Brussels and make suggestions? If they did, I would find it highly embarrassing.
Robert Henry Bugeja
Dec 9th 2011, 05:34
Julian...so what was the purpose of joining the EU according to you?
...To be Taxed left, right and centre and just follow orders and we just shut up?...This is the second time the PN sold Malta to a foreign rule.
SHAME ON YOU!!!
Paul Cassar
Dec 8th 2011, 17:12
BUT WHAT DOES FAIRNESS ACTUALLY MEAN ?????
Paul Caruana
Dec 8th 2011, 16:46
The clock is ticking......if the euro financial "bomb" is not defused within the next few weeks, then the only option left is to evacuate the EU building before it goes off!
mark borg
Dec 8th 2011, 18:48
True and a bit of a far cry, from the heaven on earth promised prior to joining, this bankrupt beyond belief club.
Dominic Chircop
Dec 8th 2011, 16:29
As usual, what is essentially a macroeconomic problem is being turned into an unimportant local political pique.
One cannot fault Minister Fenech for showing optimism, for the contrary is hard to envisage. Although it is in the interests of all Member States to safeguard the existence of the euro, one should not say dogmatically that the euro will not fail. So did they use to say about the gold standard, but one day it did fail. In such a calamitous possibility, I hope that our CBM and financial authorities are already thinking in terms of baskets of currencies, balances of trade, and exchange rates. As regards fiscal consolidation, this will, like it or not, have to come about. And will not the approval of eurozone states' budgets by Brussels be a form of restriction to ones sovereignity ? That is why a lot of House of Commons MP's are clamouring for a referendum on the much touted Franco-German treaty amendments. As regards federalism, it may be a bit too early to mention. But rest assured that it is at the back of the minds of a lot of Brussels bbreaucrats !
Sandro Pace
Dec 8th 2011, 16:07
\What a far cry from ten years ago, when the EU was being depicted as 'fairy' tale land, where nothing of this sort could have happen. Stability galore. The euro-romanticsm backfired, letting down the people who almost had, or unbelievably still has, a blind trust if not faith in this now unmanageable institution. The fairy tale has changed to an unfairness nightmare apparently. From Grimm to grim. The minister's face says it all.
The EU was OK without the Euro, or barely. Then someone dreamt of a monetary union, more to fulfill a political ambition and dream of a united europe of a few lunatic people up there, and ruined everything.
The last straw. As if we care for any european unity. Patriotism apart now that we are in it, a monetary union without a centralised disciplined fiscal and economic regime, was also a fairy tale. As it was, the Euro was too much based on trust between member states. And where there is money, there should be no trust, but controls as tight as a submarine.
Germany now has every legitimate and moral right to dictate things. Beggars cannot be chosers. May God help us, even as we EU citizens constitutionally denied Him. Those taking decisions seem as confused as those building Babel.
Martin Bonello
Dec 8th 2011, 16:07
While the Minister's logic sounds good, we often hear from investement companies that ' il-passat mhux garanzija tal-futur'. Just because a country has been behaving does not mean it will continue to do so, and having uniform rules serves to help prevent even well behaved countries from going astray. If we are behaving, we should not be worried about rules keeping us in line. Its like the laws of a country...unless I have intentions of breaking the criminal laws, I have no objections to tougher sanctions.... What the Minister is saying is that we should only vaccinate sick people, when vaccination is a preventive exercise, aimed at avoiding the necessity of enetering into even more expenses with treatment etc..
The Minister's simplistic, childhooh level fair vs unfair reasoning could perhaps best be countered by the tried and tested adage...PREVENTION IS BETTER THAN CURE!
Peter Murray
Dec 8th 2011, 16:06
Malta will be told what to do irrespective of what they actually do and how responsibily they do it!We are mere pawns in this game of chess and have no effective say in anything and we can puff out our chests and compare size all we may but no one will listen to little old insignificent and irrelevant Malta.
Evarist Saliba
Dec 8th 2011, 15:33
I am glad to see that the Hon. Minister is not taking the opportunity of the Euro crisis to jump on the bandwagon of European federalism. Before one even starts to consider that eventuality, the constituent bodies of the EU should put their house in order, and administer themselves in such a way that euroscepticism is replaced by the original euro-enthisiasm among the people of the nation states underpinning the Union.
Federalism is no solution for indiscipline.
Richard Curmi
Dec 8th 2011, 15:20
The Lisbon Treaty was passed for such a thing. What Tonio Fenech said in the interview is logic, however that will not happen. The political class in brussels wants to have total control unfortunatly alas why the lisbon treaty was forced down our throats Tonio, and you know it. It is pointless to cry unfair now.
victor caruana
Dec 8th 2011, 15:14
Dear Minister, who are you talking to? Who leads and take decisions in the EU? Is is Sarkosy and Merkel, Barroso, the six monthly president, Rompuy, Mickey Mouse? Who? Who?
When you decide who, then go and bark up is tree!!!!!!!
Stuart McNeil
Dec 9th 2011, 00:39
good for you pal--totally agree
Jos Busuttil
Dec 8th 2011, 14:11
Can't agree more with Hon T. Fenech. The EU is not federal, it is made of independent states and should remain as such. In the EU, what's good for the goose is not necessarily good for the gander due to different socio-cultures, politics, level of economies and languages.
Mario J Spiteri
Dec 8th 2011, 14:10
Hon Tonio Fenech you should start first to refuse €500 weekly increase! Bhalma jghid il-Malti "biex tiskongra trid tkun pur"
Jo Camm
Dec 8th 2011, 14:29
Mr Spiteri - Meta jkun hemm diskussjoni serja taqbisx fic-cucati!
John Schembri
Dec 8th 2011, 14:45
Oh please cut this crap, who do you want to represent your country with a €19,000 ‘wage’,not even a cesspit plumber.
Thank God that people who come up with such sound arguments in international fora are representing our country.
I hope PL concludes this honoraria debate with the PN so that it will attract more valid people like Professor Scicluna.
With peanuts you cannot feed horses , you attract monkeys.
Lawrence Fenech
Dec 8th 2011, 16:22
@Spiteri.
Mhul-500 Euro biss, idabbar rasru.
Jesmond Farrugia
Dec 8th 2011, 14:01
Angela Merkel and Nicolas Sarkozy ought to give David Cameron the assurances he is seeking. Malta's position is that there should be as few new treaties, as possible.
d. attard
Dec 8th 2011, 13:31
Yesterday i had the opportunity to do much travel all over Malta. I came across a significant number of 'projects' that are carefully walled in. I drove through detours where the roads were beautifully tarmacked. But something did not seem right. So i stopped the car and peeped through some of the the 'walls'...and guess what. hardly any work was underway...so can the Minister, who says the we are staying within parameters, say if a sudden surge of activity will happen to complete these 'projects' some 2/3 months before the next election, meaning that the ensuing cost will be carried forward post election as a new government (be it blue or red) will see the 3% threshold being once again exceeded as happened post last election (and the one before that)?
Mr ALBERT LEONE GANADO
Dec 8th 2011, 12:56
Tonio Fenech is absolutely right in insisting that if a country stays within the established EU financial parameters of 3 per cent budget deficit and 60 percent debt ratio it should be left free to manage its budget and own economy the way it deems most fit in the interests of its citizens. This not only to maintain the overriding principle of national sovereignty but also because each country requires a degree of financial flexibility which best suits its economic development and growth objectives.Of course it would be easier to manage the eurozone if there was a common fiscal policy but such a policy would favour the larger countries with a lot of external debt and penalize small countries like ours who have different debt profiles and social needs which demand a very different sort of economic model. What in my opinion is needed are two improved measures to better monitor and impose sanctions to anticipate and rectify quickly the position of delinquent countries. One measure is the development of a better financial and economic health model which can better discriminate a country's well being. The current two parameter model is too crude an instrument and more economic indicators should be incorporated to allow for better discrimination. The other measure is that a staged response by the EU should immediately be triggered once countries exceed their threshold limits. As long as countries stay within the limits or can show economic trends that indicate clearly that the indicators are rapidly moving in the right direction towards the threshold they should be left free to manage their own economy and fiscal policy. If the deviation is going the wrong way or reaches certain figures than an automatic and escalating EU mechanism should be triggered (irrespective of the influence or size of the country) to impose control and enforceable fiscal policies on the countries heading for disaster and dragging others with them in the process.
Alan Attard
Dec 8th 2011, 15:29
@ Mr. Albert Leone Ganado,
Spot on; fiscal responsibility
Paul Micallef
Dec 8th 2011, 12:48
'fairness'????????????????? E.U have never shown us FAIRNESS, look at the ILLIGAL EMIGRANT problem, have they been fair???? As now, well as always, we have been in the CLUCHES of Germany and France, there is nothing that YOU can do , everyting is done between these two, history repets itself. England does not care, as they have a stable curency. You now, if there has to bee any change in the way that these two want to do things, will we be asked to vote again???? Will our goverment tell us what is going on????? As they have left us out in the past, only the big boys can play in this CLUB.
One thing that made me vote against the EU was the fact that we as a nation are very stingy that is our way, and places like ITALY anD Spain only SPEND SPEND SPEND, even IRELAND has to do more, ISSIKAR TAC CINTURIN. I hope that YOU are right Gonzi and that we can saty afloat, as if we have to make these kind of SACRIFICES we will all go to the DOGS, well not you and co as you have given yourself a HEFTY PAY RISE:
Angus Black
Dec 8th 2011, 13:59
"...as if we have to make these kind of SACRIFICES we will all go to the DOGS, well not you and co as you have given yourself a HEFTY PAY RISE"
What kind of 'SACRIFICES' are you referring to, Mr Micallef? Have your wages been lowered/frozen? Have your taxes gone up? Has your pension been slashed? Has the VAT you pay risen to 23%? Have Health services been reduced or a 'user fees' introduced? Have students been deprived of their stipends and instead they have to take massive loans?
Why don't you scrap the record, or at least replace the needle? What do you think a 'FAIR' salary should be for the PM and his Ministers?
The salary they receive today even including the infamous raise, is hardly sufficient just to have to listen to such inanities coming from the same direction all the time.:
C Cassar
Dec 8th 2011, 14:43
The EU has given Malta €500 million after any contributions. I woul dcall that more than fair considering what Malta has actually contributed to the EU so far, which is very little indeed.
The EU has bbeen a godsend to Malta in many ways.
R. Cilia
Dec 8th 2011, 15:59
Angus
Quote:
The salary they receive today even including the infamous raise, is hardly sufficient just to have to listen to such inanities coming from the same direction all the time. Unquote
Pathetic comment coming from a diehard PN apologist !
Peter Seebohm
Dec 8th 2011, 12:48
You are 100% correct Mr Fenech
michael fenech
Dec 8th 2011, 12:43
Is this a joke? Minister Fenech is saying quote. But if a country is beyond that then I’m sorry that country has to pull its socks up and politicians have to assume that responsibility, unquote. Is that what our politicians do assume responsibility? If they did we will have nobdy left.
Tony DeBattista
Dec 8th 2011, 12:25
Ibdew intom billi twaqfu iz-zida skandaluza ta 500 euro fil-gimgha kif wara kollox qed jaghmlu pajjizi ohra, mhux dejjem ibati iz-zighr
Saviour Cachia
Dec 8th 2011, 12:24
In my opinion Hon. Tonio Fenech remarks are balanced. But i hope that the Maltese Government do all to keep within the below 3% deficit of the GDP and the cumulative of 60% of the national debt .Let's hope that in today's meeting the head of states of the European Union look more how to strenghten the present economic situation, and yes, why not, introduce heavier discipline regarding those members that are at default. Certainly European Union and eurozone disintegration will get us no where, but more chaotic situations. Let us give the heads which are meeting today in Brussels some credit of intelligence, rather than stupidity.