Labour MP Alfred Sant has called for the setting up of a parliamentary committee to hold ongoing discussions on developments within the eurozone, given the continuously changing situation.

Dr Sant said that Parliament was being faced with a fait accompli when it was supposed to act as an instrument of scrutiny. Prime Minister Lawrence Gonzi had justified Malta’s entry into the eurozone because he had said the euro would give stability to the national currency. This had been a dangerous statement because it had put the national currency outside local control.

The ESM Bill confirmed this because Parliament would be ratifying a treaty where Malta would be participating in a mechanism dealing with instability within the eurozone and where its strength was minimal.

Dr Sant said that the euro had its advantages, especially with regard to trade, but it also had its disadvantages. The major defect within the eurozone was that its structures were weak in a globalised world.

The zone started with the premise that each member was solely responsible for its financial and economic successes and failure. Other members did not have to offer support.

The Greek crisis showed that this support had to be given because the crisis would have a contagion effect. This led to the setting up of the EFSF as a temporary measure. This has now been turned into a permanent structure known as the ESM. All this showed that the situation went out of the eurozone members’ control.

Dr Sant said this led to changes in the draft treaty to be approved by Parliament.

Malta had been promised that the euro would give stability to the country, when present situations showed that nothing was predictable.

The eurozone was reacting to events that were out of EU control.

The financial crisis was at a global level. The eurozone was a financial union that did not have the necessary financial structures to respond to these challenges and member states were being asked to contribute more to the ESM.

Dr Sant described the facility as an example of creative accounting built on guarantees.

Malta had committed itself to a promise of guarantees amounting to €1.2 billion, claimed Dr Sant. The Finance Minister himself had admitted that Malta had to increase its guarantees because it was not classified as a triple A country.

One also had to look at the opportunity costs including interest paid on government bonds issued when it would get less in interest if guarantees to such countries as Greece had to be paid.

Dr Sant criticised the European commissioners who failed to take action on falsified Greek statistics. They also failed to take action when eight Spanish banks did not pass the stress tests carried out in 2011. They only said these banks had a problem, with Spain now requesting €100 billion in aid. There was a problem of account stability.

Dr Sant concluded that the ESM itself was not transparent and accountable and Malta had to be wary of how much it had to commit itself.