Ten years on, former Prime Minister Alfred Sant is still very critical of the transition to the euro, saying the country was not much better off than when it was part of the sterling zone prior to the establishment of the defunct Maltese lira in the 1960s.
Dr Sant, a Labour MEP since 2014, was speaking during a business breakfast organised by the Malta Institute of Management marking 10 years of Malta’s euro zone membership.
He insisted that the euro played no part in helping Malta steer out of the 2008 global financial crisis.
His remarks contrasted sharply with those of the rest of the other speakers, including members of his own party, and economists who had an overall positive judgement on the experience so far.
In his address, Dr Sant described Malta as a “policy taker” rather than a “policy maker” as a consequence of its size when compared to countries like Germany.
The former Prime Minister was also critical of EU membership saying it had not led to increased economic growth, but rather to a contraction of industry by about 30%.
He claimed that this decline was made up for through EU funds, tourism and the gaming industry.
According to Dr Sant, terrorism also played a part in the sense that Malta profited from instability in neighbouring countries.
As for the 2008 global crisis, Dr Sant noted that the fact that Malta emerged relatively unscathed had nothing to do with the euro.
He argued that this had also been the case in the 1970s when Malta’s lira had just been established. Back then, Malta emerged from the crisis with flying colours on its own steam, he remarked.
Reacting to his remarks, Prime Minister Joseph Muscat, who delivered the concluding address, gave a more positive evaluation. While acknowledging that the single currency had its difficult moments, he said the “political project” was here to stay.
He noted that its greatest challenge was posed at the height of the Greek crisis, but said EU leaders had made a political choice to keep the euro zone alive.
As for the future, he expressed himself in favour of the setting up of a European Monetary Fund, which would prevent the “humiliating experience” of having a troika taking delicate decision as happened during the Greece crisis.
Opposition leader Adrian Delia said that the benefits of membership were perhaps more visible than those of the euro, but the latter should not be taken for granted.
He said the alternative to the single currency was social and economic disintegration. Dr Delia urged the government to stop denting Malta’s good reputation in the financial services sector.