this week: If the shoe fits, wear it
Flexibility is nice, but
Jacques Chiracs plea to the EU to be more flexible with the so-called
Stability and Growth Pact does not auger well for the EU, or for Malta.
One of the main reasons why the Maltese voted to join the EU was to
achieve a sense of discipline in fiscal and other matters.
Chirac is pushing for greater flexibility in the EUs strict budget
rules, and he is not the first one to do so. The pact, which underpins
the regulations guarding adherence to the European Monetary Union, demand
budget deficits be no more than three per cent of the GDP.
Commission president Romano Prodi had called the regulations stupid,
but quickly retracted his accusations.
If Chirac gets his way, and certain countries may be tempted to back
him, the EU could see itself moving towards the type of wooliness that
would defeat the raison dêtre of many of the reasons for
Germany, like France, is likely to find itself in trouble controlling
its budget deficit, and Minister Hans Eichel has indicated his country
will be giving more importance to economic growth at this stage, rather
Malta too needs to think about growth, and while both Germany and France
have ambitious plans to cut spending and stimulate economic activity,
our government politicians for the moment seem too busy celebrating
EU accession to be do anything about it.
Certain unpopular decisions will have to be taken in the coming years
and we had better get used to the idea soon. Malta needs to explore
innovative ways of stimulating entrepreneurship, without compromising
the viability of our natural assets.
Maltese politicians have enjoyed the unsupervised power over our land
for a long time, and the last thing we need is an EU that will allow
too much flexibility.
Deficit control has been on the agenda in Malta for years and despite
much talk, successive governments have not managed to push government
debts below the three per cent GDP threshold. We have, in fact, been
rather off the mark. Malta is not yet an EU member, but it is hoped
that politicians will be responsible enough, once we join to ensure
that the EU retains its stringent rules applied to all countries equally;
and not merely in the budgetary sector.