Parliament meets again this morning to continue discussing the Participation and Granting of Financial Stability Support under the European Stability Mechanism Bill in committee stage and possibly give it a third reading. The Bill authorises the government to participate and grant financial stability support under the European Stability Mechanism (ESM).
The debate, which started on Wednesday, was characterised by objections from Labour MP Alfred Sant on the haste with which the government expected the House to approve the Bill. He said it should have been presented for discussion earlier and not at the eleventh hour. “We are here talking about a Bill that obliges Malta to put half a billion euros, if not more, into the EU Stability Pact,” he said.
Finance Minister Tonio Fenech had earlier confirmed to the House that the European Commission had clarified every euro area member, including small states such as Malta, were entitled to seek aid from the ESM if they were in financial difficulties even if such problems impacted the eurozone.
Mr Fenech said this clarification was made by the EU general directorate for economic and financial affairs at the request of the Maltese government. The matter had been raised by Dr Sant.
The opposition had requested the government to annex a side letter to the ratification of the ESM Treaty clarifying that approval was being given on condition that ESM support would apply to Malta if the need arose, even if the country’s financial difficulties would have no impact on the euro area.
Emphasis was also placed on the fiscal pact that contains the “golden rule” that binds states to ensure balanced budgets to avoid financial crisis. Such a rule is to be incorporated in the constitution of EU member states.
Mr Fenech said the text of the golden rule was still under discussion in the EU financial working groups. It would lead to mechanisms under which governments were obliged to take remedial action on a country’s debt and deficit. The European Commission would intervene if this process failed and could impose penalties. The Finance Minister also clarified that the ESM was to be used only in cases of emergency.
On questions raised by Dr Sant, Mr Fenech said if the ESM were to lend to banks directly, the text of the treaty would have to change. As it stood, it meant that lending by the ESM would be made to governments. State aid rules would still apply in lending to banks.
At one point, there was a heated debate between Deputy Speaker and chairman of committees Ċensu Galea and Dr Sant, who wanted to discuss the treaty clause by clause. Mr Galea pointed out it had already been approved because it was a schedule attached to Clause 2 of the Bill.
Dr Sant said Mr Galea was not leading the discussion correctly. Parliament was expected to accept each and every EU treaty without discussion. He emphasised the treaty should be discussed and approved by the national parliament. Mr Galea denied Dr Sant’s accusations, as the treaty would get the importance it deserved.
Dr Sant objected to Mr Fenech’s insistence that the treaty should be approved by Parliament by Monday because he (the minister) had a scheduled meeting tied to the treaty. Dr Sant insisted every treaty up for ratification should be discussed clause by clause. He challenged the chairman to suspend him from the sitting but would fight for the Maltese Parliament’s sovereignty to be respected.
Another outburst occurred near 9 p.m. – the usual time of suspension of House business. Government whip David Agius told the chairman there was an agreement between the two sides that the discussion had to be wound up .
Dr Sant objected to the government trying to pass the Bill hastily as it should have been presented to Parliament for discussion.