Prime Minister presents bill to amend Constitution

Prime Minister Lawrence Gonzi this evening submitted a Bill to amend the Maltese Constitution for its first reading. The amendment will include the so-called "golden rule" as part of the Maltese Constitution.

The golden rule is a new fiscal rule which says that national budgets shall be balanced and the annual structural deficit does not exceed 0.5% of nominal GDP.

Gonzi added that Parliament should also ratify the European Union Act to include the European Stability Mechanism (ESM) as soon as possible.

Opposition leader Joseph Muscat, who has before reiterated the Opposition's support to the constitutionalisation of the golden rule, said the Opposition was not there "to play games".

Muscat said the Opposition will work with government, but wanted to assure that the agreement will not place Malta in a straitjacket: "We should neither hurry with the amendment, but we shouldn't take too long. We must move forward according to a timing which is in the country's best interest."

Muscat also said that government should explain from where the €40 million announced in the budgetary revision will be cut. He also urged the Prime Minister to reveal how the City Gate project - costing some €80 million - will be financed.

Former prime minister Alfred Sant said that government should explain more in detail what the amendments mean and how the new Acts will affect Malta. Sant commented how other countries discussed the issues at length.

Sant added that nothing new came out of the EU summit and no new measures were announced.

Reacting to the Opposition's questions, Finance Minister Tonio Fenech said that two weeks before the Budget, members of the European Commission had come to Malta to see how the country was faring. Government had then based the Budget on that meeting.

Fenech said it was true that Malta was one of the countries asked to review its position because of the excessive deficit procedures: "At the same time we know very well that our economy is open to what goes on in Europe. Because we have a fiscal goal, we had to take corrective measures and keep up with our goals. We wanted to take precautions to avoid resorting to austerity measures."

On the budgetary cuts, Fenech said that €10 million of the €40 million will come from salaries and wages of workers employed with government: "We have taken the decision not to replace one out of every two who retire when they reach retirement age. At the same time, we have asked our workers to avoid doing overtime, if that overtime is not needed."

Reacting to Sant's comments, Gonzi said it was not true that government hid everything from the Opposition and said he did not expect Muscat to refer once again to what happened last week in parliament when the no confidence motion had been defeated.

"But it was too much of a temptation for him not to fall for it," Gonzi said, as members of the Opposition commented how government is without a majority.

Gonzi said how could Muscat say that nothing had happened since December, when Italy's government had toppled? Gonzi criticised the Labour Party for the "amateur and superficiality" of their politics.

Gonzi said government always believed that the fiscal discipline and consolidation should always be the priority. He added that the golden rule will lead to consequences, including binding any ruling government with taking the difficult decisions which need to be taken, even though this might not be popular.

He also explained that once the European Stability Mechanism (ESM) comes in to force, the EFSF will be phased out.