Malta will not cede more economic and fiscal powers to Brussels before an overall agreement is reached on the fine details of new proposals launched earlier this week, Prime Minister Lawrence Gonzi said last night.
At the same time, Malta is also insisting it will not subscribe to Country-Specific Recommendations (CSRs) made last month demanding a further increase in the retirement age and a restructuring of the COLA (cost-of-living adjustment) mechanism.
Meeting in Brussels for their traditional two-day mid-year summit in Brussels – amid the ever growing eurozone debt crisis – EU leaders yesterday agreed to a €120 billion growth package. This will mainly direct unspent EU funds towards various projects including fighting youth unemployment and boosting the lending capacity of the European Investment Bank.
Last night they also started discussing a plan submitted by the President of the European Council, Herman Van Rompuy, detailing a 10-year vision aimed at further integrating economic and monetary policy in the EU.
The blueprint – seen by many as going much further than what is currently allowed under the EU Treaty – suggests a genuine economic and monetary union with further integration on many fronts including the coordination of national budgets giving Brussels the right to intervene, the pooling of national debts and common fiscal policy including taxation.
Asked to state Malta’s position on these controversial proposals, Dr Gonzi said Malta was in agreement on the general principles but wanted to discuss the fine details first.
“We all want to boost the euro and to have a broader vision. However we need to discuss the fine details first before we can say whether Malta is in agreement or not.”
Discussions on the Van Rompuy report only started late in the night and was expected to spill into the little hours of this morning.
The proposals have many implications on individual member states and many are sceptical about whether the EU will manage to agree on this “common vision” due to sharp differences particularly among Germany and France.
“We are not expecting an overall agreement on this vision during this summit,” Dr Gonzi admitted.
“We started discussions but this will take time.”
Malta yesterday also kept up its objections to the recent Country Specific Recommendations (CSRs) issued by the Commission at the end of May.
Among the binding recommendations, the Commission asked Malta to further increase the pensionable retirement age, which is currently being raised to 65 years over a staggered period, and to restructure the wages index so that increases reflect higher productivity.
Reiterating Malta’s position taken during a meeting of finance ministers a few days ago, Malta yesterday declared it was not in agreement with the text of the recommendations and argued that these reforms are not necessary in the medium-term economic and demographic Maltese scenario.
Acknowledging that some member states had “politically sensitive issues” with certain recommendations, the President of the European Commission Jose Manuel Barroso said at the end of the summit’s first session that there was broad agreement on the CSRs even though some countries were not “completely satisfied”.