Malta will save €16 million in payments to the European Stability Mechanism through the deal it sealed with three other small members of the eurozone during the EU summit on Thursday night.
Malta, Slovakia, Slovenia and Estonia managed to pull off a deal with the other eurozone members to get favourable conditions on their contribution towards the €700 billion fund. This is aimed at reassuring markets of the euro’s stability while acting as a safety net for member states that could require a bailout in the future.
The deal, which takes account of the small population size and the lower economic development of the small countries compared to the larger ones, will replace the temporary eurozone bailout fund from 2013 onwards. It will see Malta paying €56 million over five years into the fund rather than €72 million. The funds will not be lost by Malta and are intended to act as a guarantee for the eurozone to raise the needed cash on the international markets.
“These funds will earn Malta interest while at the same time guaranteeing the stability of the euro, which is in our national interest,” Prime Minister Lawrence Gonzi told a press conference in Brussels at the end of the summit yesterday.
Dr Gonzi took the opportunity to categorically deny suggestions made in The Spectator magazine that Malta, together with Spain and Italy, might soon need a bailout.
Describing the remarks as “totally baseless”, Dr Gonzi said, on the contrary, Malta had one of the healthiest economies among the 27 member states, registering a 3.7 per cent growth in its GDP last year, one of the best performances in the EU.
Dr Gonzi said the government had just revised its deficit for 2010 downwards to 3.6 per cent from the projected 3.8, further proof that Malta’s economy was responding well to the government’s initiatives.
He said that, in its Stability and Convergence Plan, to be presented to Brussels in the coming weeks, Malta would be pledging to continue cutting its deficit while planning more investment in employment, health and education