The debate in committee stage of the Bill amending the European Financial Stability Facility Act continues on Monday after the sitting was adjourned in the early hours of Thursday following a protracted six-and-a-half-hour session in which former Prime Minister Alfred Sant said he did not find the facility’s Framework Agreement in the records of the House. The government said it had been tabled.

The Act was approved in July last year and the Bill to amend it was unanimously given a second reading after a three-and-a-half hour debate. The opposition said it would vote in favour.

But when the Bill started being discussed in committee, Dr Sant observed that while the Act stated that the Framework Agreement had been tabled, he had not found it in the records of the House.

Mr Fenech said that once the law said the agreement had been tabled, it must have been. He was certain it had been presented to the opposition. He took no responsibility for what happened to documents after they were tabled.

Dr Sant said a copy of the agreement was tabled by Parliamentary Secretary Jason Azzopardi on Tuesday. He raised questions over the legality of the process leading to the enactment of the law last year.

Acting Speaker Ċensu Galea suspended the sitting at about 10.15 p.m. to look into the records and establish the position.

When the sitting resumed at 11 p.m., Mr Galea said no records of the documents resulted. However, he had been advised by the Attorney General that since the law itself said that the document had been presented to the House, the legality of the process was not in question.

Replying to further questions by Dr Sant, Mr Galea said the debate indicated that the agreement had been seen, although there was no record of it.

Dr Sant said there was nothing to show it was really tabled in the House and this raised serious legal questions. A law was enacted under false pretences. Mr Galea said that once it was recorded in the Act that the agreement was tabled, it was considered as having been tabled. At this stage, Dr Sant requested a formal ruling. The debate was suspended again at 11.15 p.m.

The sitting resumed at 12.45 a.m. In his ruling Mr Galea said the law was enacted in the normal manner. What was approved by the House became law. And a declaration that a law was irregularly enacted could only be made by the courts.

The debate then continued.

Mr Fenech said he was presenting another copy of the agreement to dispel any doubts.

Dr Sant said the House was only now being presented with a copy of the amended agreement after the facility was extended. This was not how matters should be handled. The amended agreement included new conditions for the country and it was shameful that the opposition never came to know of those new conditions.

Mr Fenech said he had presented a memorandum to the opposition with all the changes. The government was not doing anything underhand. Should Dr Sant wish, this debate would be postponed till Monday to give Dr Sant more time to see the document.

Dr Sant confirmed that a memorandum had been received by the opposition but said it was the amended agreement which counted. The Bill had to refer to the amended agreement, not just the agreement, as otherwise it would be vitiated. Even the bailout agreement with Greece had not been tabled.

An adjournment of the debate, therefore, made sense for matters to be clarified. It needed to be made very clear what Malta’s new financial obligations were.

Mr Fenech said he would consult the legal drafters to ensure the amendments were correct and the debate would resume on Monday.

The Bill provides for Malta to extend its guarantees to the EFSF to just over €700 million. It was being debated in parallel with another Bill to authorise government lending of a further €24 million to Greece in terms of the eurozone bailout.

Winding up the debate in second reading, Minister Fenech answered opposition concerns, maintaining he had spoken of the gravity of the situation at a European level and also on the great risks Malta was shouldering.

He spoke at length on the collateral issue saying that this had been requested by Finland for electoral exigencies. This was in the context of Greece’s second bailout and had not yet been approved by the Council of Ministers. Malta had requested equal treatment as other member states but would not take the collateral because it was not in the national interest. On the issue the Prime Minister had affirmed what he had said earlier.

Mr Fenech accused the opposition of trying to undermine the government when the latter explained its position within context. The minutes of the Council of Ministers’ meetings showed Malta’s position. Solutions to the Greek crisis would not be complete as long as the financial markets remained agitated.

Malta’s exposure on the Greek loan would be between €45 and €74 million. Its exposure to the guarantees given to Greece amounted to €6 million but could go up to €8 million. The exposure to guarantees for the Irish debt stood at €3.5 million with the possibility of rising to €5 million. The exposure to the Irish debt stood at €54 million but could reach €87 million.

The minister also spoke of Dr Muscat’s proposal for the setting up of a European Monetary Fund adding that the Labour leader had copied this from the Financial Times. The European Stability Mechanism (ESM) was similar to such a fund and to the IMF. It would be able to intervene in financial markets without burdening member states.

It would take time to establish the ESM because of the need of ratification by member states. Extending the European Central Bank’s role, as suggested by Dr Muscat, would also take time because it would need ratification of the treaty.

Mr Fenech said the opposition’s stance in favour of Eurobonds meant that some form of structure had to be set up. This would amount to an institution including a Treasury also with the ability to impose taxation. In reality it meant a fiscal union, which Dr Muscat opposed.

Speaking during the debate on second reading of the Participation and Guarantees under the European Financial Stability Facility (Amendment) Bill, Alfred Sant said the burden Malta was shouldering to help the eurozone would amount to 17 per cent of national debt. But would these decisions for the eurozone be enough, or would there shortly be the need for further financial commitments?

Moody’s downgrading of Malta’s credit rating had underscored the illusion that the euro would have enhanced competitiveness. That verdict had strengthened the suspicion that the Maltese were not being given all the information on the country’s real financial position.

Speaking in Parliament on Wednesday, Dr Sant said the management of a single currency must be uni-directional, but the majority of European member states were insisting on safeguarding what was left of their national sovereignty.

That Malta was involved in the current confusion could be blamed on the government’s bad decision to rush the date of membership. Not only had the currency not given Malta stability, but it was now coercing the country into obligations that had never been needed to defend its previous currencies.

He was not convinced the euro’s problems would subside anytime soon. Things would get worse before they got better. It made no sense to sweep the problem under the carpet.

Dr Sant said it was an exercise in futility to imagine that what was happening to the euro was largely the result of the Lehman Brothers’ collapse three years ago and the carelessness of certain European governments in their public spending. In spite of all the efforts made over the past 20 years, the rates of economic growth within the eurozone had continued to be lower than those in other countries. If European economic growth had really taken place as promised up to a few years ago the crisis would not have occurred with the known record levels of unemployment, underemployment and insecurity of job tenure.

The euro’s crisis was part of a bigger one taking place in the capitalist world.

Locally, sectors that were doing well must be safeguarded at all costs, without losing sight of the fact that due to the success in the financial markets sector the Maltese economy had become highly unbalanced. Its productive machinery had lost its competitive edge. Malta must now step in line with EU and eurozone rules while carrying the burden of inefficiency from the past and present.

Dr Sant said that after five months he was still waiting for a list of the government’s financial guarantees. The minister had seemed to imply that the information could be misinterpreted if he gave it. What could be misinterpreted was his silence, which Dr Sant said was central to how eurozone members’ financial situation was being analysed.

Would the help being given to Greece and other countries do the trick? The Finance Minister had initially said there was nothing for Malta to lose by helping, indeed it would be making a profit. He could not be so optimistic today because Greece was failing to live up to its commitments.

Dr Sant said countries that were finding it difficult to make ends meet were being forced to accept severe austerity measures that would continue to erode economic growth, increase unemployment and discourage investment, curtailing governments’ revenues and increasing costs.

It was increasingly clear that for the eurozone to get better its member economies must get back to growth.

It was being said that if financial markets’ pressures on Italy and Spain continued to grow, the European support facility would possibly have to be extended to between two and three trillion euros. What would Malta be expected to do in such a scenario?

Such amounts were to be mobilised from within Europe, there was no other way out except for the introduction of increasing centralisation in Europe’s economic leadership. The government see-med to be against further centralisation in Europe, but this was indeed under way.