Scicluna at first euro meeting
Eurozone finance ministers have agreed to a €10 billion bailout package for Cyprus to save the country from bankruptcy. The deal was reached at 4am yesterday morning in Brussels between the ministers and the International Monetary Fund.
Funds from the eurozone will be allocated through the European Stability Mechanism, to which Malta has already contributed, which means Malta will not have to contribute any additional funds for this bailout.
Malta was represented by Finance Minister Edward Scicluna who told The Times that his first eurozone meeting, which lasted nine hours, was “quite an experience”, especially when one considers what Cyprus has had to go through.
Prof. Scicluna said: “If one had any doubts about the indignity suffered by indebted countries which are forced to seek a bailout, one should have been present for the night-long meeting held in Brussels to decide the bailout conditions to be imposed on Cyprus following the crises which left them with a €17 billion gap in their system.”
Prof. Scicluna said the bailout rescue plan contained a mixture of tax rises, a one-off levy on deposits, gold sales and plans to downsize the banking sector in Cyprus.
He said like other small eurozone member states Malta had a special interest in closely following the proceedings and ensuring that while the interest of the creditors were safeguarded, the bailout would minimise the suffering such conditions would impose on the Cypriot people.
Prof. Scicluna said he was glad that Cypriot pension funds and wages were not touched as “that would not have been fair”.
Asked if his fellow finance ministers had requested any kind of assurances regarding Malta’s commitment to the eurozone, Prof. Scicluna said: “Not at all. It was all very relaxed and there was no mention at all about Malta. I already knew about one-third of the ministers as vice-chairman of the European Parliament’s Economic and Monetary Affairs committee. The topics discussed were certainly not new to me.”
Cyprus’ banks were badly exposed to the Greek crisis, and the bailout negotiations were difficult because of the reluctance of other eurozone states to use taxpayers’ money to help foreign customers of Cypriot banks, many of them Russians.
The deal reached in Brussels includes a levy on bank deposits intended to ensure that investors contribute to the bailout. People with less than €100,000 in Cypriot banks will have to pay a one-time tax of 6.75 per cent, while those with more will have to pay 9.9 per cent. It is expected to raise €5.8 billion in additional revenue.
Prof. Scicluna was accompanied at the eurogroup meeting by the Permanent Secretary in the Ministry of Finance, Alfred Camilleri.