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Malta formally applies to changeover to euro
By MaltaMedia News
Feb 27, 2007 - 11:01:17 AM

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Updated 2026CET
Prime Minister Dr. Lawrence Gonzi submitted Malta's formal application to changeover to the euro currency at a European Union (EU) Finance Ministers meeting on Tuesday in Brussels. Should the application be approved during an EU leaders summit in June, Malta will join the eurozone in January 2008.

euroThe application was presented to the EU Commissioner of Economic and Monetary Affairs Joquin Almunia and the Governor of the European Central Bank Jean Claude Trichet.

Addressing a press conference about the application on Tuesday evening, Prime Minister Gonzi said Commissioner Almunia was expecting Malta to apply for the euro. “This is a very important statement because it means that the government is optimistic that it reached all the important economic criteria to qualify for the euro.”

Prime Minister Gonzi added that the Maltese government’s plans for the economy go beyond successfully obtaining the European Union’s approval to join the currency. “It is not a question of looking back and seeing how well we did in 2006 and 2007, but it is essential that Malta continues to move forward in a sustainable manner in the upcoming years.” The Prime Minister further added that the government’s aim is that by 2009 Malta will register surplus instead of deficit.

The application requests the EU to evaluate Malta’s progress and determine whether it has fulfilled all criteria to join the European currency. However, there is concern that the bid could be undermined by high inflation and public debt, according to EUobserver.

Public deficit is predicted to stand at 2.4% of GDP and inflation at 1.6 % in 2007, both under EU's thresholds of 3% and 2.6% respectively. However, Malta’s efforts to curb public deficit to 3% or less has come at the expense of public debt which ran at almost 70% of GDP in 2006, above the EU's threshold of 60%.

Yet analysts have noted that the public debt rule has not been previously strictly applied in the cases of Italy, Belgium and Greece which could be used as an argument by Maltese officials.

"It all depends on the interpretation" of the figures by EU and European Central Bank (ECB) authorities, the Central Bank of Malta (CBM) spokesman Clive Bartolo told Dow Jones news agency.

EU leaders will make the final formal decision over Malta during their June summit, subsequent to recommendations set forward by the European Commission as well as the ECB in May.  

If approved, the group of eurozone newcomers could amount to three member states from the ten that joined the EU in 2004 plus Bulgaria and Romania following this year, reported EUobserver.

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  Latest update:
  May 3, 2007 - 7:37:28 PM CET