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Kurt Sansone
A technical team from the EU Commission was in Malta last week to evaluate the economy’s preparedness for euro adoption ahead of the key decision Government needs to take by April as to whether Malta will join the EU’s single currency’s exchange rate mechanism.
On Friday, during a lengthy Cabinet meeting, ministers were given a run down of the situation but no decision was taken as to whether Malta should join ERMII, the two-year period during which the Lira will be completely pegged to the Euro.
Talking to the media yesterday, Prime Minister Lawrence Gonzi said that if Malta wanted to adopt the Euro at the earliest possible date it had to take a decision by April. He also ruled out the devaluation or depreciation of the Maltese Lira.
“If we do not decide by April it means Euro adoption will be postponed by a number of years. In 2008 a number of new entrants will be adopting the Euro and Malta could risk being less competitive if it remained outside the single currency,” Gonzi said.
“All the studies we have confirm that the value of the Maltese Lira is real and there is absolutely no need for devaluation or depreciation before adopting the Euro,” the Prime Minister remarked when asked whether devaluation was on Government’s cards.
The 10 new member states are obliged to adopt the single currency but are not bound by any EU imposed time frame. Economic experts are divided as to whether Malta should adopt the Euro at the earliest possible date (2008) or postpone it for a later period, taking time to bring the country’s deficit and debt under control.
The latter option may risk putting Malta at a disadvantage over the rest of the EU Member States that would have adopted the Euro in 2008.
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