Labour MP Alfred Sant told Parliament on Tuesday that for the law and the treaty establishing the European Stability Mechanism (ESM) to be enacted, one had to first amend the Treaty on the Functioning of the European Union (TFEU) with respect to the economic administration of the euro. This would then permit negotiations to take place on the treaty establishing the ESM.
He was speaking during the debate on the motion ratifying the agreement signed last March that set up the ESM, which will replace the European Financial Stability Facility (EFSF).
This indicated that Parliament was not functioning properly, he said. It had ratified the treaty establishing the ESM yet not the treaty that permitted such a ratification.
Parliament was not monitoring seriously what was happening in the eurozone. With the euro as Malta’s currency, such an illogical action should not have been allowed to take place.
He complained that no proper dialogue existed in Parliament. It felt as if the Government had given up hoping to negate anything coming out of Europe.
The Government needed to analyse how its commitments towards the ESM could develop, since they might grow. He also asked whether any stress tests had been conducted, as it seemed at the moment that the situation would not improve.
Dr Sant asked whether Maltese banks such as Bank of Valletta and HSBC would fall under the system of European supervision. Was the Government studying Malta’s position regarding the proposed banking union? Was this union advantageous to the country’s economic situation, and if it wasn’t, how was the Government preparing to counter it?
Moreover, there was another problem which one needed to reflect upon: there was general consensus at the European level that control of the bank union should be fully vested in the European Central Bank, which would be divided into two autonomous departments. This meant moving away from the political practice that had been adopted in the last 25 years across Europe, including Malta, where central banks were divested of their supervisory role. In Malta’s case this power had been transferred to the Malta Financial Services Authority, he said.
He asked whether this meant a transfer of the MFSA’s role to the central bank and also whether a contradiction was evolving in having a whole transfer of powers.
Maltese politics should no longer abide by all that emerged from Europe because the island’s commitment towards the eurozone amounted to €1.3 billion.