Prime Minister Joseph Muscat told Parliament yesterday that Malta had tried to be the voice of moderation and of true European values while safeguarding the national interest in the talks to resolve the Greek crisis.
In a briefing to the House on the recent summit that led to the bailout agreement between the EU and Greece, he said that among the reforms Greece was being asked to carry out were revisions to pensions, a bank privatisation programme and the reversal of laws which go against the previous bailouts.
The bailout needed may reach €100 million but Malta would not be required to fork out any more cash. The IMF analysts has said that, if the reform package was implemented, the debt might be paid in full even if the countries might need to give Greece some elbow room.
PN deputy leader Mario de Marco remarked that the process was humiliating for Greece and its people were the victims of the situation. The two greatest victims in all this were trust and credibility and the Greek people would bear the brunt of this for some time to come.
Greek Prime Minister Alexis Tsipras has an inclination to live dangerously
He said that the government and Opposition had identical positions on this issue.
He warned, however, that there remained too many questions for the affair to be considered closed. This crisis showed what a great stabilising machine the euro was.
He asked Dr Muscat to elaborate on the debt restructuring being proposed for Greece.
In reply to this and other questions posed by Kristy Debono (PN), Robert Arrigo (PN) and Charles Mangion (PL), Dr Muscat said Malta was the only country whose response to the Greek crisis was unanimous, which strengthened the voice of the government in international fora.
This was the true definition of Europeanisation since it transcended party trivia.
He agreed with Dr de Marco’s observations and said Malta had stuck to its mandate. He admitted Greece would find implementing the package gruelling, mainly due to Greek Prime Minister Alexis Tsipras’s inclination to live dangerously.
The Greek administration would be micromanaged. The income from Greek assets would be directed to a fund and ring fenced for debt repayment under EU supervision.
The assets would accrue from the sale of banks, from service providers, port operations and any other possible cash cows.
He would have preferred fewer targets with more certainty of attainment than the current situation.
Dr Muscat said that, so far, three attempts at restructuring the Greek debt had reduced the interest rates and lengthened the repayment period. This agreement now provided for debt to be due to the ESM mechanism.
However, the debt repayment would mean the receiving country’s income wouldn’t even be deflated. At this point, Greece needed bridging loans, which the EU was discussing. Such discussions were difficult and would be lengthy and involve political as well as economic issues.
Dr Muscat recalled that all the Maltese banks had passed the stress tests carried out by the European Central Bank and could withstand a crisis. The recent declaration by Standards & Poors was ample evidence that Malta was not going for a bailout – “that might be the wish of someone else,” he said.
Malta’s debt ratio had fallen from over three per cent to around two per cent. Various measures were being taken to ensure that no other EU countries faced such economic issues. Malta had already implemented the necessary legislation to tighten the budget process.
Malta’s exposure to Greece, including both cash and guarantees, was of €177 million which at the time amounted to 3.2 per cent of the GDP. Economic growth had reduced it to 2.2 per cent.
Dr Muscat re-affirmed that Greece was an important partner to the EU.