Parliament approves EFSF ratification

Updated at 23:08: Parliament approves EFSF ratification

After almost three hours on the issue, Parliament this evening approved the EFSF ratification, marking the 16^th parliament in the eurozone to approve a bill which increases the powers of the European Financial Stability Facility (EFSF).

As from tonight, Slovakia remains the only eurozone country yet to ratify the bill.

Despite another objection raised by Alfred Sant asking for the changes in the EFSF to be discussed at a committee level, parliament moved on with the session as the Opposition did not support Sant’s call.

Fenech said that “because of Malta’s responsibilities” the bill had to be approved today. 

One of the important amendments of the bill is that the EFSF could now intervene in secondary markets. This intervention would be based on the agreements with the individual member state, Fenech said.

The agreement was also amended to cover loan guarantees of €704.33 million - increased from €398,4 million. This also called for a ratification in the loan guarantee, which now meant that for every €1 loaned, member states are now guaranteeing €1.65.

Throughout the reading of the amendments, Sant complained that he had been given a different text. Problems arose when Fenech started reading clause 4 and then moved on to clause 5. Sant first said that he thought they were still on clause 3.

Censu Galea, the Acting Speaker, informed Sant they had already voted on clause 3 and were going through clause 4. Sant replied that there was a mix-up in the documents he had received.

Before approving clause 5, after Fenech read out the amendments, Sant said he had a different text.

Sant also asked how Malta – who had a loan limit of €30 million – could have loaned Greece €44 million. He also asked the Finance Minister to table a copy of Greece’s commitments to pay back the loan.

Fenech said there was a provision in the law which stated that the Finance Minister could allow the temporary use of the funds in cases of emergency.

Sant asked what Malta risked to lose if Greece’s economy failed. Fenech said that the Maltese government's exposure was the €40 million loan, while the private sector’s exposure was not to too high or significant to leave an effect.

He however did not specify an amount. Fenech added that it was important that Greece be aided if the eurozone was to be safeguarded.

“If Greece failed there’d be a contagion effect throughout the eurozone,” Fenech said, adding that no member state would willingly allow that.

At the end of the sitting, Sant criticised government for “treating parliament in an arrogant manner.” He claimed that in front of proposals similar to today’s, government was not giving it the appropriate attention. He added that government needed to be more "serious" when dealing with such issues.

Prime Minister Lawrence Gonzi intervened and told Galea he “could not accept” Sant’s accusations:

“Government communicated with the Opposition, and informed both Joseph Muscat and Charles Mangion on every decision. We also asked the Opposition to come forward if there were any difficulties.

“We accepted to postpone the approval of the bill to today, while the rest were asking why we were delaying it.”

Gonzi also commented on how the Opposition Leader was not present for the session.

Updated 20:52 Acting Speaker Censu Galea gives ruling over procedure: Parliament authorises EFSF ratification and implementation. Parliament discussing amendments as Finance Minister asks for time extension to conclude and pass the bill today.

Parliament had to suspend the debate for the approval of Malta's loan to the EFSF as the Speaker of the House was called by Alfred Sant to rule whether the House was following the adequate procedures needed to ratify the agreement.

"Intergovernmental agreements call first for a ratification process and then implementation of that agreement. I call for a ruling to decide on how to handle the EFSF agreement,” the former Labour prime minister said.

Sant called for the ruling to clarify whether the ratified agreement was going to be approved by simply laying it on the table of the House, or whether they were going to go through the process mentioned.

At the start of the sitting, Sant wanted to clarify that – as opposed to what the PN media had reported – he had not been “nitpicking”.

Last Wednesday, when Parliament was supposed to approve the EFSF ratification, Sant repeatedly questioned the legality for approving the law, which was originally approved as an Act in July last year. The amendment was to provide for the extension of the facility for the Greek bailout.

Sant had objected to the resolution, which stated that the bill had been presented to the House. However, Sant insisted that there was nothing to demonstrate or prove that the bill was in fact tabled, and to him as an MP, it posed serious legal questions.

Earlier in parliament, Sant said that last week the House had agreed to discuss the EFSF ratifications and the resolution’s fund at Committee stage. He however objected that this was not listed in the agenda.

Following a cross-debate between Sant and Fenech, Prime Minister Lawrence Gonzi intervened to clarify that Malta had approved the Greek bailout but was clarifying an amendment – “so any existing doubts would be eliminated.”