Gonzi welcomes Constitutionalisation of a balanced national budget

Prime Minister Lawrence Gonzi said the Maltese government's programme goes hand-in-hand with the European Council's proposal of a balanced national budget, and Malta had no problem in seeing this tool integrated in the Constitution.

"The European Council agreed the basic tool should be a balanced national budget. Malta has no problem with this - it is in fact our programme. Our policy is to achieve a balanced budget and we are moving in that direction," Gonzi said this morning in Parliament.

He reiterated the 2009 recession had halted government's plan, and exceptional measures had to be taken to safeguard jobs.

"We still are in the right direction to reduce the deficit under 3% of the Gross Domestic Product, making us one of the few countries to exit the Excessive Debt Procedure."

Gonzi said Malta had no problem in seeing countries that do not abide to the Growth and Stability Pact, face penalties and automatic corrective measures.

"We do not have any problem with the golden rule of a balanced national budget becoming part of the Constitution," Gonzi said. "I urge the Opposition to join government and together work in favour of safeguarding jobs and our workers."

He once again thanked the Opposition for agreeing with government's position in the Council.

The Constitutionalisation of a balanced national budget will come into force through an Intergovernmental Treaty between the 17 Eurozone Member States. The rest of the EU member states, with the exception of the United Kingdom, expressed the interest to join in the process.

"Our government's wish is to see all 27 member states implementing this process," Gonzi said.

The Prime Minister said the European Council is one of the most important developments of the European Union:

"The Council is a huge success. Elements, which the financial markets were expecting to see participating in economic activity, were addressed. We do not see economic activity as an abstract exercise. Economy is the drive and commitment to create and safeguard jobs for the creation of wealth which leads to a better life for workers and families."

Gonzi said the financial markets were asking two basic things of the European government: stability and certainty. "I believe this Council achieved a formula by which both elements can be delivered," he said.

The European Council also agreed to speed up the process by which the European Stability Mechanism (ESM) will be ratified by mid-2012. It also agreed the European Financial Stability Facility should be finalised as soon as possible.

It is estimated that the EFSF would generate €500 billion.

The EC agreed to increase the resources of the International Monetary Fund (IMF) by €200 billion, where the Central Bank will lend €150 million to the Fund.

"We also affirmed the Private Sector Involvement - operated in the Greek programme - was a unique and exceptional measure," the Prime Minister said.

Gonzi said the accession of Croatia to the EU is not only a significant step to the country and the Balkan region, but also for the rest of Europe. "Despite all existing turmoil, the EU remains the tool for wealth, stability and development."

On energy, the Prime Minister said all States agreed for the urgent need of progress in several sectors. "Of particular interest to Malta is the declaration that no EU member states should remain isolated from European networks of gas and electricity or have its energy security threatened because of non-adequate connections."

During the summit, Gonzi reiterated the need for the Libyan assets to be unfrozen and placed at the disposal of the new government. "I was pleased to note agreement to this," he said.

Gonzi said despite the economic turmoil, "together we are the taking the necessary measures to face and overcome the storm".

"My government's commitment is to continue working to safeguard and create more jobs and wealth," Gonzi said. "Wealth brings dignity, creates adequate health, education and social services and increases investment in the environment for better quality of life."