Karmenu Vella (PL) said the Opposition would be voting in favour of the treaty since its objectives were positive.

However, he agreed with Dr Sant that no common solution could be found to solve the problems of the different countries, as each was passing through different economic cycles. The treaty was offering one solution – opting for balanced or surplus budgeting in order to avoid accumulating debt .

In order for Malta to improve its fiscal situation it needed to meet set targets. He had repeatedly asked Finance Minister Tonio Fenech to confirm whether Malta would manage to meet the deficit targets for this year. To date no feedback had been given. It seemed that the minister was reluctant to commit to meeting the targets. He also asked how the treaty would specifically affect Malta especially with regard to measures to control the deficit which would result in less flexibility.

If an EU member state’s deficit exceeded the limit of three per cent of GDP, the Excessive Deficit Procedure was set in action against that country. This could lead to financial sanctions until relevant measures were in place to stabilise the country’s financial situation. Malta was currently still under an EDP since its deficits were deemed to be structural and not temporary.

A number of different institutions, among which the European Commission, IMF, credit rating agencies and the Central Bank of Malta had warned the government that it would be difficult to meet the deficit targets set for 2012. Economists were forecasting an increase in the deficit over last year which could reach 75 per cent of the GDP.