At the end of last week, the summit of the 27 heads of government of the European Union met to ward off the threat of an implosion of the eurozone.

The EU Commissioner for Economic and Monetary Affairs had stated that this meeting was the last opportunity to conclude the response of the EU to the crisis of the euro.

...if the EU takes concerted action to control speculation, it should address the issue of the sovereign debt, which is at the basis of the problem- Lawrence Zammit

We need to remember that there already had been a number of meetings in the last 12 months that were meant to provide long-lasting solutions. However, they all seemed to have failed.

The reactions of the financial markets to the results of last week’s summit cannot be described as positive.

Possibly nothing better could be expected since the President of the EU Commission himself made a comment that the agreement reached to save the euro was not enough. The main news item after the summit did not seem to be the contents of the agreement but rather the fact that the United Kingdom was against the agreement, which will eventually lead to changes in the EU treaty.

In Malta both the government and the Opposition have stated that the agreement is a positive step forward. However, both also agree that Malta’s interests need to be safeguarded when we get to the detail of the changes to the treaty.

The agreement itself does make interesting reading and if the EU takes concerted action to control speculation, it should address the issue of the sovereign debt, which is at the basis of the problem.

The agreement pushes into two directions: a new fiscal compact and stronger coordination of economic policies in areas of common interest.

In the context of the fiscal compact, there is agreement that the annual structural deficit should not exceed 0.5 per cent of the gross domestic product, unless there are exceptional circumstances that would warrant going over the threshold.

There is also agreement that such a rule be enshrined in the member states’ legal systems at constitutional or equivalent level.

This is something that I have long believed to be correct. Moreover, member states that are in excessive deficit procedure need to submit plans on the structural reforms they intend carrying out.

Within the context of stronger policy coordination nothing concrete is said. There is reference to the European Financial Stability Facility, but nothing much is said as to what additional financial resources this will be given.

There is also reference to a common economic policy, but with no specific definition as to what this would imply. In fact this is the area that should be of most concern to Malta.

We should adhere to the balanced budget principle; but each EU member state should be allowed to determine itself how this is to be achieved. Tax policy should remain the prerogative of the member state.

Looking at the bigger picture, my fear in all this is the continued speculation. While on a business trip to the UK, I came across two elements which are indeed frightening.

The first is a statement by a financial analyst that fund managers do not invest for the long term. This would imply that when they invest, they need to realise a gain in the short term, making them open to the temptation to indulge in speculative activities.

The second element is a statement by someone working in wealth management that an €8 billion portfolio is small and that funds need to have at least €20 million under management to start counting for something.

Such a size of fund is 50 per cent larger than Malta’s gross domestic product. Both these elements indicate that speculation can only be tackled within the framework of the EU and not by individual member states.

So far this does not seem to be happening and last week’s agreement does not provide much comfort.

My final comment is about the Maltese team in Brussels, led by the Permanent Representative to the EU, and who had been working 18 hour days in the run-up to the summit.

They are the people behind the scenes who look after Malta’s interests. We need to recognise their work and the results they achieve.

In the current circumstances, the last thing we should do as a country is to take for granted the work required to ensure that our interests are safeguarded, when having to deal with complex issues that are much larger than us within an international gathering.