Malta will continue to “reserve the right” to demand collateral from Greece for its chunk of an EU-wide bailout fund, Prime Minister Lawrence Gonzi said yesterday.
Speaking on his return from an Eastern Partnership summit in Warsaw, Dr Gonzi said the government would exercise its right to request collateral if at some juncture during the bailout process it “deemed it necessary” to do so.
Last week, the government announced that it would be following in Finland’s footsteps and seeking collateral in order to secure its own guarantees to Greece. It is estimated that Malta will be guaranteeing some €400 million as its contribution to the fund, part of which will be used to help Greece pay its debts. It is not clear, however, how that country’s beleaguered economy would be able to provide such guarantees.
Finland’s parliament yesterday approved its contribution to an enlarged eurozone bailout fund after reportedly dropping its demand for collateral. Germany, the eurozone’s largest economy, also approved the expansion of the fund on Thursday.
To come into force, the €440 billion European Financial Stability Facility, as the fund is known, needs the approval of all 17 eurozone member states.
Describing the German vote as “positive”, Dr Gonzi voiced his optimism that Malta would follow suit and ratify the fund during next Wednesday’s parliamentary session. “I am convinced that there will be unanimous parliamentary approval,” he said.
Meanwhile, the EU and its member states, particularly Germany, are raising the heat on Slovakia, which represents the last real hurdle in the way of ratification.
So far, a small member of the Slovak governing coalition, the Freedom and Solidarity Party, has refused to give Prime Minister Iveta Radikova assurance that it will support the EFSF’s enlargement.
Although the party yesterday said that it was open to a compromise, the Slovak PM warned there was no guarantee the country’s Parliament would approve the fund during a vote to be taken before the next EU summit on October 17.
Slovak Commissioner Marcos Sefcovic yesterday entered the fray saying he could not imagine his country blocking the deal. “I cannot imagine renegotiation of (EFSF) documents and agreements beyond what they were agreed... after so many countries, including Germany, approved it.”
Dr Gonzi yesterday spoke about the Eastern Partnership summit he had just attended. The summit, which the Prime Minister described as “immensely positive”, brought together EU member states and five countries from the former Soviet bloc – Armenia, Azerbaijan, Ukraine, Georgia and Moldova.
Emphasising the economic potential of strengthened relations with these countries, Dr Gonzi said that he had encouraged delegates to pursue a partnership agreement which focused on tourism, language education and information technology.
Trade delegations may come to Malta from Azerbaijan and Georgia.