Malta stalls EFSF ratification, Sant raises legal objections to resolution

A parliamentary sitting to approve Malta's loan facility to Greece had to be adjourned at 1 am and postponed for continuation on Monday, after finance minister Tonio Fenech said he would be consulting a legal team to ensure that all amendments in the bill were "clear" and that all Malta's financial obligations were known.

Throughout a marathon sitting, Alfred Sant repeatedly questioned the legality for approving the law, which was originally approved as an Act in July last year, and the amendment was to provide for the extension of the facility.

Finance Minister Tonio Fenech moved the bill which went into second reading, during which time, the opposition said that it was going to vote in favour. But when the bill was debated in committee, Alfred Sant flagged an updated text of the EFSF agreement had not been presented along with the resolution that authorises its approval. He added that the text needed to be examined in light of new obligations for Malta.

At this point, the finance minister replied that once the resolution stated that it had to be tabled, then it was, adding also his certainty that a draft memorandum had been passed onto the Opposition. Sant subsequently confirmed however that the draft was in fact received by the Opposition but the amendments were not clear and requested plenty of clarifications.

Acting Speaker Censu Galea, who presided the committee, had to suspend the sitting until 11 p.m. while he ordered the clerks of the House to find the record. Galea returned with a negative reply but added that the Attorney General advised him that since the resolution  stated that the bill had been presented to the House, there was absolutely no question about the  legality of the process.

Sant however, insisted that there was nothing to demonstrate or prove that the bill was in fact tabled, and to him as an MP, it posed serious legal questions.

The former Prime Minister resisted any explanations and asked for a formal ruling, with the sitting having to be suspended again at 11:20. and resuming at almost midnight, with Sant accepting a proposal by Tonio Fenech to have the amendments clearly explained and Malta's obligations to the fund also made clear.

The debate will continue next Monday with a view for a final vote on the same night.

The delay in parliament’s approval comes as an embarrassment to government, as eyes are set on Malta as one of the last few countries within the eurozone to ratify the urgent increase in the fund which is intended to bailout Greece.

Through the bill, Malta is to extend its guarantees to the EFSF to €700 million, while also lending a further €24 million to Greece.

Labour backs EFSF, but warns for 'no further commitments'

During the debate, Opposition leader Joseph Muscat warned that while Labour was backing the commitments made by Malta for the Greek bailout and the enlargement of the EFSF, no further commitments which might affect any future Maltese government, should be made without discussion.

Muscat said that the Opposition augured success to the eurozone and favoured solidarity, it was imperative that future commitments had to be  open to negotiation according to economic circumstances at the time. Malta he said cannot afford to be extravagant in loans or guarantees to other countries as taxpayers are already burdened with economic pressures.

Muscat said that Labour was showing determination in acting responsibly and in the national interest on this and that safeguarding the eurozone from further turmoil was vital..

Muscat disagreed however with the way things were being handled over the Greek bailout, and expressed concern that the plans and proposals would not achieve the desired results, given the prohibition of potential to achieve economic growth.

Labour he said was totally against the proposed financial transaction tax and asked if government had indeed calculated the impact of such a tax on the economy.

Malta's exposure to Greece, Portugal and Ireland bailout may total €87 million 

Finance Minister Tonio Fenech said that €80 billion has been already loaned to Greece through the first bailout by the eurozone countries, including Malta, under a series of bilateral agreements, however the country needs further assistance through the EFSF.

Malta's payments totalled €19m in 2010 and €20m for this year. Another payment of €5m this month has been postponed pending the progress report.

Fenech said that in through the EFSF Malta is set to contribute €58 million in paid up share capital which would not be calculated for the purposes of the national debt since the EFSF was considered as being a financial institution.

The current exposure to Greece totaled €45million, and possibly increase to €74 million.

He added that with Portugal, Malta's exposure totalled €6 million, and could increase to €8 million while for Ireland the total was €3.6m and could rise to €5m.

In total Malta’s exposure stands at €54 million, and may potentially increase to €87 million.