Any deal over the Greek crisis at today’s emergency meeting of eurozone leaders must not jeopardise Malta’s economic success, the Prime Minister has said.
Joseph Muscat said yesterday that Malta, along with Germany, was the most exposed country to Greek debt.
“We want the best deal for Europe, Malta and Greece... The issue for us is how to ensure that what was achieved over the past two years is not undermined by what happens in Greece,” Dr Muscat said.
The Prime Minister will be attending the emergency summit in Brussels, billed as a last ditch attempt to reach an agreement with Greece.
Unless creditors release bailout funds, Greece risks defaulting on a €1.6 billion payment to the International Monetary Fund by June 30.
A default would set Greece on course to exit the euro and possibly the EU. Dr Muscat said it was important that Greece remains in the euro, insisting he would seek assurances that any deal would not put Malta’s positive performance at risk.
Malta’s exposure to Greece amounts to some €177 million and is a mixture of bilateral loans and guarantees to the European financial stability mechanism, which was set up after the crisis first broke in 2010.
Joseph Muscat‘Tomorrow, banks won’t open if no agreement’
As a ratio of GDP the exposure puts Malta on the top rung along with Germany. However, unlike other eurozone countries, Maltese banks have very little or no exposure to Greece and there is very little trade going on between the two countries.
Today’s emergency summit was called after eurozone finance ministers registered an impasse last Thursday when no progress was reported on a deal to release €7.2 billion in bailout money to Greece.
No bank loans money to someone who can barely afford the loan interest
Greece’s creditors want the disbursement to be linked to economic reforms over which no agreement has been reached. The Greek government, elected in January on a platform to end austerity, has rejected conditions imposed by fellow eurozone member states, the European Central Bank and the IMF.
Austerity has impoverished many Greeks as the country struggles under a mountain of debt.
The impasse has led to massive cash outflows from Greek banks with savers withdrawing about €4.2 billion in deposits last week alone.
Dr Muscat said over the weekend that another €1.7 billion had been withdrawn by depositors. Greek banks will only open for business today after a loan from the ECB on Friday.
“But if no agreement is reached Monday evening, it is likely Greek banks will not re-open on Tuesday,” Dr Muscat said.
kurt.sansone@timesofmalta.com