Updated | Muscat reassures Maltese banks not exposed to Greece

With the prospect of Greece exiting the Eurozone and defaulting edging closer, Joseph Muscat reassures that Malta will not suffer dire consequences • Eurogroup denies Greece bailout extension • Edward Scicluna predicts humanitarian crisis

Prime Minister Joseph Muscat and Greek Prime Minister Alexis Tsipras
Prime Minister Joseph Muscat and Greek Prime Minister Alexis Tsipras

Prime Minister Joseph Muscat reassured that in the case Greece is declared bankrupt, Malta will not be negatively effected since “Maltese banks are not exposed to Greece.”

“I would like to put everybody’s mind at rest that in the worst case scenario of Greece going bust, Maltese banks will not suffer any consequences.”

Moreover, he said that if Greece exits the Eurozone its debts, including the €177 million owed to Malta, will be repaid.

Insisting that the Greek government’s decision to hold a referendum was “irresponsible” Muscat said that although the Greek government had a right to hold a referendum “it did not have the decency to discuss the matter within the European Council which ended yesterday.”

Talking from Gozo, Muscat said the Eurogroup would continue discussing the matter without Greece adding that it seems that the debt-ridden country was not in a position to repay the €1.7 billion it owes to the IMF by Tuesday.

He added that if the Greek people decide to stay in the Eurozone, the leftwing government has given its word to respect the decision despite campaigning against an agreement.  

Scicluna predicts humanitarian crisis

Speaking to MaltaToday from Brussels, finance minister Edward Scicluna explained that negotiations were “unilaterally” brought to a sudden end by Greece and repeated that the timing of the referendum was diabolical.

“The referendum should have been held one or two months ago and certainly not a week after Tuesday’s deadline by which time all funding to Greece will have been blocked.”

He explained that following Greece’s withdrawal from the Eurogroup meeting, the remaining 18 ministers held an informal meeting during which they discussed a contingency plan for the coming days.

While pointing out that Greece remains a Eurozone member as long as the Greek government does not submit an official demand to exit the currency, Scicluna said the EU and the ECB had all the instruments in place to defend the single currency.

Moreover, the minister said that the EU and its institutions had the means to stop contagion, especially in countries exposed to Greece such as Cyprus, Bulgaria and Serbia.

Scicluna also predicted a humanitarian crisis in the coming days since banks will no longer receive funding from the ECB, adding that this could be a determining factor in the referendum. He however said that the EU will intervene and help Greece financially if a humanitarian crisis occurs.