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.
The 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
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
progress and determine whether it has fulfilled all criteria to join the
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
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
Romania following this year,