Haircuts are not simply a technical issue, they are a political one

Speaking at an informal meeting of the Economic and Financial Affairs (ECOFIN) in Amsterdam, the Minister for Finance Professor Edward Scicluna welcomed the Council`s commitment to take a step forward in improving the automatic exchange of tax information.

He said that Malta supports measures in favour of further transparency, whilst at the same time realising that such measures need to be taken in context and special attention given to their implementation, in order to remain competitive.




On Greece, the Eurogroup concluded that the policy package should include a contingent package of additional measures to be implemented only if necessary to reach the primary surplus target for 2018. The contingency mechanism needs to be credible, and be based on objective factors.

Professor Edward Scicluna said “contingency measures give comfort to the creditor countries and serve as a backstop to the first set of measures, however, our Parliament would definitely object to any haircuts on the debt. Haircuts are not simply a technical issue, they are a political one”.


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Finance Ministers discussed the strengthening of the banking union and in particular the regulatory treatment of sovereign exposures. Professor Edward Scicluna stressed that during the financial crisis, Malta needed no bank bailouts, while in the aftermath it watched other countries having their debt sustainability worsening due to global speculation increasing their spreads due to the national debt held by outside entities. “At that time, my country felt protected with a high ratio of debt being held by local financial institutions and domestic house loans. We believe there are more real risk sharing and risk reduction initiatives on our table to deal with before we look at this newly perceived risk”, Minister Scicluna said during the meeting.

Other agenda points addressed during the ECOFIN meeting were the European Union’s Stability and Growth Pact.

Minister Scicluna’s intervention stressed the importance of aiming for robustness and consistency whilst adjusting the debt, deficit and expenditure rules and not simply going for an overhaul based on subjective assumptions. He said that he would like to see more work done on improving cyclical adjustment procedures.

The ECOFIN meeting was preceded by the Eurogroup session on Friday 20 April 2015.



For the meetings, the Minister for Finance was accompanied by the Permanent Secretary Mr. Alfred Camilleri, Governor of the Central Bank, Prof Josef Bonnici, Chief of Staff Ms. Tania Brown, Director for EU Affairs Ms. Diane Muscat, and Policy Officer with the PREU Ms. Sandrell Sultana.

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Saturday 23th April 2016


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