Malta was willing to consider changing the EU Treaty as part of a Franco-German proposal to solve the debt crisis if this was the only way to bring stability to the markets, Prime Minister Lawrence Gonzi said last night.
“If changes are needed to the treaty to enable us to achieve the common ideal of a stable EU and avoid repeating the same mistakes by introducing new budgetary controls, then Malta is ready to cooperate,” Dr Gonzi said.
However, he reiterated his government’s belief that there may be “more practical” solutions that did not require “complicated and lengthy” treaty changes.
The Prime Minister was speaking on his return to Malta after meeting Danish Prime Minister Helle Thorning-Schmidt.
The two discussed the forthcoming Danish EU presidency’s priorities.
On Monday French President Nicolas Sarkozy and German Chancellor Angela Merkel agreed to make a series of proposals aimed to end the biggest crisis facing the eurozone since its inception.
The leaders of the largest two economies in the euro area have asked the other eurozone members to agree to a new EU Treaty by next March – which would also include constitutional changes in member states.
The two countries said they were prepared to establish a eurozone treaty if agreement among the EU 27 countries was not possible.
Malta has until in the recent past argued that treaty changes should be “as limited as possible” and a last resort. But a senior EU diplomat told The Times that the growing crisis left “little room for manoeuvre” especially for the small member states.
The Franco-German proposals will only be presented in detail today, ahead of the two-day heads of government summit that starts tomorrow in Brussels. President Sarkozy and Chancellor Merkel seek an agreement by Friday.
Stephanie Cutajar, an economist at E-cubed Consultants, said markets were waiting for a sign of confidence from European policy makers.
She said better fiscal discipline was needed and although the Franco-German solution would take months to be discussed and ratified by national Parliaments, it was a necessity.
“Europe needs a concrete and clear commitment from all member states to save the euro and the European project,” she said. Budgetary rules that favour a balanced budget and sanctions that would come into force should a country exceed the three per cent threshold would surely be a clear commitment from the EU towards sustainable public finances.
But Edward Scicluna, a Labour MEP and vice president of the European Parliament’s economic and monetary affairs committee, is less optimistic. He believes that the proposal is unlikely to placate markets unless leaders accept it unreservedly.
“This is an unlikely scenario and the European Parliament and most experts are telling the Council a treaty change is not what the eurozone needs now at the 11th hour.”
Chancellor Merkel’s legalistic approach, he added, was intended to address the moral hazard and ensure debtor countries would comply with what creditor countries demanded of them.
Additional reporting by Ivan Camilleri in Brussels.