Malta's efforts to keep its economic flexibility paid off this afternoon as a possible introduction of a Financial Transaction Tax and a Common Corporate Tax Base as originally proposed by France and Germany were removed from the final agreement.

"This is a successful summit for Malta as we have managed, albeit with difficulty, to safeguard out national interest," Prime Minister Lawrence Gonzi told a press conference in Brussels after all-night long talks interrupted only for two-and-a-half hours.

According to the summit's conclusions, the 17 member states of the Euro area and nine out of 10 non-Eurozone member states now aim to sign a new intergovernmental treaty by March to strengthen fiscal union particularly through the euro area.

Only the UK decided not to form part of the new treaty.

The new rules will have significant impact on Malta as the island will now be obliged to cut its deficit by at least 0.5 per cent of GDP per year in order to reach a balanced or surplus budget.

On the other hand, those member states which surpass the three per cent deficit rule will now incur automatic sanctions defined by the Commission and the Council.

Malta also agreed to introduce a Constitutional amendment to commit the country towards balanced budgets.

This 'golden rule' – already adopted by some member states including Germany - will contain an automatic correction mechanism that shall be triggered in the event of a deviation.

This will be defined on the basis of principles proposed by the Commission with the European Court of Justice (ECJ) having jurisdiction to verify the transposition of this rule at national level.

Dr Gonzi said that although Malta is already moving towards a balanced budget and hoped that the opposition will also support this amendment.