EU leaders yesterday decided to postpone further reforms to integrate the bloc’s monetary and economic policy and instructed Council President Herman van Rompuy to spell out details in a June summit.
Plans presented earlier this year for more integration, including a common eurozone budget, the introduction of a Financial Transaction Tax, and written contracts on reforms were not met with enthusiasm by the majority of member states.
While a number of large member states, such as France and Germany, favour the EU deepening its common economic and monetary rules, others, particularly the UK and Sweden, are pulling in the opposite direction.
Although Malta, the EU’s smallest economy, has not taken sides, it had already signalled problematic issues particularly with regards to more fiscal integration.
“We agree on the main principles of having more economic integration,” Prime Minister Lawrence Gonzi told a press conference yesterday in Brussels, following a two-day summit meeting.
“However, we are awaiting further details as some aspects, particularly on common taxes, are no-go areas for us.”
Under the current EU treaty, taxation is still an issue for member states to decide and Malta has already made it clear it will not give up any sovereignty in this area.
Malta’s taxation system is considered to be one of the main reasons of its success in attracting foreign investment, particularly in the field of financial services.
Dr Gonzi warned that the changes that the EU was currently discussing would also involve a change in the treaty which would not be an easy task to achieve.
“Remember how difficult it was the last time we changed the treaty,” the PM said.
The biggest achievement of the end-of-year summit, which also brings to an end the six-month rotating presidency of Cyprus, was a deal on EU banking supervision struck during the first day of the gathering of EU leaders.
Malta’s three largest banks, from the current 25 registered, will be put under the direct supervision of the European Central Bank.
From January 1, Ireland will take on the EU presidency, with its first task being the conclusion of negotiations on the EU budget for the seven-year period between 2014 and 2012.
An extraordinary EU summit is expected in February to wrap up the discussions on the budget.