Labour MP Alfred Sant on Monday expressed doubts whether Greece would be able to pay back to Eurozone member-states the funds given by them to escape default because Greece’s way of chasing stability without economic growth could not work. Loans to Greece could only go up in smoke.
He said that the Bill to amend the Government Borrowing and Granting of Loans to the Hellenic Republic Act was simply extending the schedule of the maturity of the loans. He forecast Malta would have to do without its money, as private creditors had done.
Dr Sant said this state of affairs was confirming that the eurozone was bogged down in austerity. Instead of producing results, the current policy was exacerbating the sense of recession. Events in Spain and Portugal showed that their economies were shrinking in spite of the austerity.
Not enough attention was being paid to the need of other measures besides austerity in order to create new economic activity and beyond political rhetoric. Dr Sant said he could not see economic growth being placed at the forefront.
Convergence of efforts by the eurozone was as essential as ensuring that no member would finish up in a hole. If this happened, eurozone members would not be able to blame Greece but only themselves for contradictory economic and financial policies.
Dr Sant castigated the government for expecting Parliament to act as a rubberstamp in approving the second Greek bailout. Circumstances had changed so much from the original bailout plan that the prospect that Malta could make a profit from such a transaction (borrowing from the public to lend to Greece) had deteriorated to a point that Malta could end up in the red. The funds to be loaned to Greece had increased; the conditions had been made softer and interest rates had been lowered.
The government, which was presenting the Bill as a consequence to the eurozone agreement, was taking things lightly. Parliament was not even following its own legislation relating to the ratification of international agreements. Transposition of EU laws into Maltese legislation was not ratification.
Dr Sant said that Parliament was approving these loans through a vitiated course of action. This should stop, the more so that there were other major developments looming which could affect Malta’s sovereignty. The government was presenting MPs with a fait accompli without holding in-depth discussions – with the help of technocrats – before, during or after the negotiations.
After attending euro summits, the Prime Minister and the Finance Minister were feeding MPs superficial facts, already known through the media. This was in deep contrast with what was happening in other Europe parliaments, namely those of Denmark, Finland and Germany. Maltese MPs were being fed stale information and asked to hurriedly approve such agreements.
The government’s attitude did not transmit confidence, he said. It wanted to silence the opposition by steamrolling over Parliament. Dr Sant said the country should first be presented with detailed information to allow it to arrive at a national consensus to defend its interests during the developments expected in the eurozone and global markets.
He complained that the House did not have a forum where it could discuss such agreements holistically and technically. To arrive at a serious judgement, the House must pass through an on-going analysis on the stability of the euro. Because of this shortcoming, Parliament’s strength was being diluted. The government did not have any strategy to defend the national interest.
There was now a state of relative calm after it seemed that Greece had temporarily stabilised its financial position through its haircut and the new loan from the eurozone and the IMF. This was only a small part of the financial support given to Greece by private creditors in past years, coupled with the people’s hardships. It remained to be seen if the current Greek technocrat PM could deliver on his promises that all austerity measures would be implemented.
Germany and France had threatened Greece with bankruptcy and ousting from the eurozone if it did not succeed, but this was really no different outcome than what would have happened anyway if the country had defaulted.
Parliament was being asked to sanction actions to help Greece achieve its economic aims in spite of the effect on low and medium earners. The government was having to follow EU orders, such as shaving €40 million off the approved 2012 Budget, while the restructuring of Air Malta was having to wait EU approval.
All these developments were closely intertwined, said Dr Sant, and the government was being reduced to the level of an EU local council. “Consultation” of MPs was only happening after decisions were taken.
The Bill was approved.