Parliament approves European Stability Mechanism act

The Maltese parliament has approved the resolution authorising the EU Act, amending the Treaty on the Functioning of the European Union, with regard to the setting up of a stability mechanism for the eurozone.

Finance minister Tonio Fenech, cutting a lonely figure on the government's benches, kicked off the debate by explaining the implications of the stability mechanism and the benefits this would provide.

As with most debates concerning Europe and the euro, former Labour Prime Minister Alfred Sant addressed the House and warned against the imbalances in the eurozone and called for the introduction of further amendments to safeguard Malta's interests.

In July, the government accepted the inclusion of a side-letter with the eventual document of ratification of the treaty setting up the European Stability Mechanism (ESM), setting out its interpretation of the proposed wording of the treaty.

Labour MP Karmenu Vella also argued for safeguards and said Malta should be treated equally if Malta ever needed any financial assistance. He also asked what kind of weight will the side-letter approved in July will have.

Vella pointed out that while the financial state of the eurozone is of interest to the country, he said the finance minister should explain Malta's own financial situation.

He noted that Malta's debt had increased by half a billion euros this year alone and asked Fenech to give a detailed account of the country's financial state. Vella said the focus should not be on who Malta is debt with but the amount of the national debt.

"National debt is growing at a dangerous rate. If I borrow money to build a house for my children is one thing but if I borrow the same amount to squander on gambling and other vices is another thing altogether. There is nothing wrong if money is invested in something which can generate income and be serviced sustainably. However if it is squandered then problems will arise," Vella cautioned.

In his closing comments, Vella called on the government to come clean and use the country's resources and finances wisely.

In his winding-up address, finance minister Tonio Fenech said the government never offered any resistance to annexing a safeguard letter to the treaty and this will be included with ESM treaty.

He added that the Maltese government has always backed calls for greater integration in Europe, however warned that "a one-size-fits-all" policy could be harmful.

On the banking union, Fenech said: "In principle, Malta has nothing against having a Europe-wide supervisory body, however we must see what implications this will have on Malta."

The amendment was approved unanimously by the House after a few corrections were made to the act. This week, Parliament will also discuss the ratification of the European fiscal pact.