Malta has made a loss of €43,000 so far in payment of higher interest rates on the loan made to Greece as part of the EU bailout, a parliamentary committee was informed this afternoon.

This loss will increase to €369,000 per year under the second bail out agreement with Greece if interest rates on Malta government bonds are not revised.

The losses came about because Malta borrowed at a higher rate than the loans it gave Greece,

The information was given by Permanent Secretary Alfred Camilleri from the Ministry of Finance when he gave a presentation on the Greece bail out situation today to the Economic and Financial Committee.

The Committee, under the chairmanship of Labour MP Silvio Schemebri was discussing the amendment to the legislation on the loan made to Greece under the Agreement on the borrowing facility signed in Brussels last December.

Finance Minister Edward Scicluna said that lessons had to be learnt from this situation. Malta’s share in this burden was nothing different from that carried by other EU states even though Malta is the smallest EU state. This made its burden higher than that of other countries like Germany.

IMF reports also showed that a lot of time had been taken to react to the Greek and Cypriot financial problems while projections were too optimistic.

This gave time to private investors to withdraw their investments increasing the burden on taxpayers and contributing states. Projections on Greece and Cyprus had been too optimistic.

Former Minister Tonio Fenech gave his reaction but switched off the m microphone not to be recorded. He later explained that the burden under the second bail out agreement to Greece was held by the respective contributing governments including Malta. The European Central Bank had committed itself to give a share of its profits to national central banks to pass over to respective governments to finance this borrowing.

Permanent Secretary Camilleri confirmed that the ECB agreement was still in force. Malta had paid €50.6 million out of its €74.5 million contribution to the Greek bail out.

He added that the Greek reform programme is giving results and the situation was improving. He said that nearly all countries had ratified the amendments to the loan agreement.