Brussels to say ‘yes’ to Euro as Frankfurt confirms parity rate

Karl Stagno-Navarra
Prime Minister Lawrence Gonzi and his government are set to receive a boost today as a European Commission and European Central Bank convergence report will recommend that Malta formally adopts the Euro as its national currency as from January 1, 2008.
As revealed by this newspaper a week ago, the convergence report will praise the Maltese government’s handling of the process for achieving “more than satisfactory” results in satisfying all the necessary criteria.
While other media have already speculated about the positive announcement to be made by Economic and Monetary Affairs Commissioner Joaquin Almunia in a press conference in Brussels, shortly after a meeting for the college of Commissioners, more positive news is set to be announced almost contemporaneously by European Central Bank Governor Jean-Claude Trichet, who is to confirm the same recommendation to the European Council that is scheduled to meet next month in Brussels under the Presidency of German Chancellor Angela Merkel.
Jean-Claude Trichet is expected to announce that Malta’s economic performance throughout the two-year period since entry into the ERMII mechanism has proved that the established parity rate of Lm0.4293 has worked well, and will recommend to keep the parity rate unchanged at the ECOFIN Council next July under the Portuguese presidency.
The convergence report to be discussed by the ECB board of governors in Frankfurt this morning will confirm the “remarkable progress” achieved by the Maltese government throughout these last three years where drastic and successful measures were taken for the benefit of the economy.
The structural deficit has been drastically reduced to below three per cent of GDP, from a high of 10 per cent just three years ago.
Inflation has been controlled to levels under three per cent, and the debt level is also decreasing.
The European Commission will confirm the economic performance results achieved by Malta particularly regarding the structural budget deficit that stood at 2.6 per cent of GDP as at the end of last year, and is forecasted to drop further to approximately 2.1 per cent this year.
Prime Minister Lawrence Gonzi is expected to react to the positive news to be announced by Brussels and Frankfurt, and is expected to address the media in the evening together with Central Bank Governor Michael C. Bonello and Parliamentary Secretary Tonio Fenech.
Other press comments are to be made by the EU Commission Permanent Representation in Malta headed by Joanna Drake.