Parliament last night unanimously approved Malta’s participation in the eurozone’s rescue fund and authorised the government to issue loans to Greece after a protracted debate during which former Labour Prime Minister Alfred Sant raised more questions on legal drafting and procedure.

... the Bill was presented half-baked and Parliament could no longer be treated in this arrogant manner

The Participation and Guarantees under the European Financial Stability Facility (Amendment) Bill passed through committee stage and was given a third reading.

The debate had started last Wednesday in a session that extended to 1 a.m. after Dr Sant held up parliamentary approval when he questioned the legality of the law under which the approval was sought. It continued yesterday and last night’s sitting ended at 11.05 p.m.

At 9 p.m., the normal time for the suspension of business, Finance Minister Tonio Fenech requested leave of House for a time extension. It was important, he said, that the documents were approved during that sitting.

Dr Sant asked what the urgency was all about, saying that had there been urgency, the House could have met on Thursday or Friday and it was the government’s fault that amendments had been produced just minutes before yesterday’s sitting. The House could set up a committee to discuss this issue further, instead of the plenary session.

Mr Fenech said the House was already in committee stage and the government was insisting on approval on the day because questions were already being asked in the EU and the financial markets about Malta’s delay. Malta had to honour its responsibilities, and the need to conclude had already been discussed with the opposition.

Opposition spokesman for economic affairs Charles Mangion said he had no objection to a time extension.

Labour MP Joe Sammut said there was no leave of House if Dr Sant objected.

Acting Speaker Ċensu Galea asked Dr Sant if he objected. Dr Sant said he did not wish to comment and the sitting then continued.

The Bill provides for Malta to extend its guarantees to the EFSF to just over €780 billion. Malta’s commitment rose from €398 to €704 million. It was debated in parallel with a resolution authorising government lending of a further €24 million to Greece in terms of the eurozone bailout.

At the beginning of the sitting, Dr Sant denied that he was nitpicking when he raised technical and procedural issues.

Minister Fenech presented amendments to ensure that the EFSF original and amended agreements together with the amended text on the Greek loan resolution would be annexed to the Bill in the form of schedules. Mr Fenech claimed that the Bill was legally correct but amendments had been presented to make things clearer. He said that attention was focussed on Malta and was even reported in the Financial Times.

Dr Sant accused Minister Fenech of incompetency, saying that during last Wednesday’s debate, he never mentioned any amendments. The Bill approved by Parliament in July referred to an agreement that was never tabled in the House. The minister never considered to include the amended agreement on the Greek loan. In this sense the law was vitiated and if he were a member of the Campaign for National Independence (CNI) he would have urged the organisation to contest the validity of the law in court.

He said Parliament could not be treated as if it were a local council.

Things had to be thought out because the government and Parliament had to build on something that would be developing. Malta’s obligations would increase and one had to be cautious on the commitments the country was to enter into.

Dr Sant said the opposition received the amendments to the Bill a few hours before the sitting and the brief given some days ago did not have any clear perspective and was full of technical mistakes. He thought that the government did not have a long-term vision and was being rushed by the EU to conclude matters.

Information was being withheld from Parliament with the excuse of confidentiality while the German and other Parliaments were given incredible briefings. The government was not being transparent.

Dr Sant spoke also on the inter-governmental agreements which he said were being presented in Parliament for authorisation rather than for ratification. These agreements did not fall within the Stability Pact or the Maastricht Treaty frameworks. Parliament was ignored on how these agreements had been formulated. These could not be approved under the Ratifications Treaty Act.

Minister Fenech replied that the Bill was implementing the agreement and the government was presenting the necessary resolution. The ceiling of the amounts to be loaned had to be approved by the European Council of Ministers.

Prime Minister Lawrence Gonzi intervened saying the Bill was being presented under the Participation and Guarantees Act which also established the procedures. He said that only the ceiling had been increased and no treaty was being ratified. Parliament was addressing a technicality. The law confirmed Malta’s participation in the EFSF. Both sides agreed to the Bill and to the bailout to Greece.

Dr Gonzi said that after attending EU summits, he always gave detailed reports to the House.

Minister Fenech said one could contest the law in court not in Parliament. One should clear any doubts and not put the law in disarray on technicalities raised by Dr Sant. The original agreements and amendments were to form part of the schedule in order to eliminate any doubts.

Acting Speaker Ċensu Galea was asked by Dr Sant to give a ruling.

After a suspension of more than two hours, Mr Galea said two processes were not needed and Parliament was ratifying and authorising the government to implement the lending to Greece and the extension of the EFSF.

Answering to a question by Labour MP Alfred Sant, Finance Minister Tonio Fenech said that the present guarantees by all countries were increased from €440 to €780 billion. Malta’s commitment would increase from €398 to €704 million.

Meanwhile, Mr Fenech said that since not all countries had an AAA credit rating, it was decided to increase the guarantees from 120 to 165 per cent. This was decided so that in the eventuality of a state requiring financial assistance itself, the fund would already have covered such reality. He was answering to a question by Dr Sant with regard to the rationale of increasing the guarantees. The part of guarantees called in bailouts only would form part of the national debt. Guarantees, issued by the Treasury, in themselves do not increase debts. Malta was committing itself to increase guarantees under the EFSF to a maximum of €704 million.

The new clause which annexed the facility agreements in the form of schedules was also approved.

Another new clause approved the resolution to extend the agreement loans to Greece.

Minister Fenech said Malta’s exposure to Greece’s default would amount to €40 million which had been lent to Greece up to now. He added that the financial institutions’ exposure if Greece defaulted was not significant and would not have a negative effect. However, if Greece defaulted, there would be a contagious effect on Europe.

At the close of the debate in committee, Dr Sant said that what happened on Wednesday and yesterday showed that the Bill was presented half-baked and Parliament could no longer be treated in “this arrogant manner”.

The Prime Minister took umbrage at Dr Sant’s remarks and said government had spoken to the Leader of the Opposition and spokesman on economic affairs Charles Mangion. The agreement was that the Bill would be approved in one sitting. He could not accept Dr Sant’s declaration that the government treated the issue with arrogance when it communicated with opposition in the national interest.

Dr Mangion clarified that when the Minister communicated with him he was abroad. The points raised by Dr Sant last Wednesday were valid and as a result amendments were presented in yesterday’s sitting. Before the German Bundestag approved a similar Bill last week, there had been a lengthy discussion and a decision by the constitutional court.

Dr Sant said the government’s consultation was very superficial. This consisted only of a three-page Finance Ministry document handed to the opposition. The Bill concerned millions of euros and issues on which there would surely be developments in the future.

Dr Gonzi replied that seriousness showed that Dr Sant should have raised these points before the debate. With whom would the government consult in future? he asked. The opposition lacked seriousness.

D Sant said that he had mentioned the points he wanted to raise in committee stage towards the end of last Wednesday’s sitting.

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