Melvyn Mangion’s transcript of EU’s Vice President Mario Mauro’ speech

THE INTRODUCTION OF THE EURO IN MALTA:

A SUCCESS STORY

Transcript by Melvyn Mangion

Mr. President

At the beginning of this year, the Euro celebrated its ninth birthday, and at the same time the Euro area welcomed two new members: Cyprus and Malta. The European Parliament, welcomed and supported the adoption of the Euro by Malta by vast majority.

In practical terms, the cash changeover here in Malta was smooth, thanks to the exemplary preparations undertaken by all people concerned. After the first working day of 2008, the bulk of coins and banknotes in Maltese purses were already Euro.

In economic terms, Malta will benefit from the vast advantages of being part of the Euro area.

Let me recall shortly the historical steps that let to the monetary union we have today: step by step, EU economic integration has progressed from a free trade area to the biggest internal market in the world.

This internal market has been supplemented by the Monetary Union as laid down in the Maastricht Treaty.

The Euro was a logical step in underpinning the Single Market and brought many benefits to its users: it has led to low interest rates due to a high degree of price stability.

Up to now, the Euro has been as credible as the best-performing currencies previously used in the Euro area countries.

Some Member States, which had very high interest rates before the introduction of the Euro have seen an important reduction in rates to their present level.

Price transparency has increased, since price comparison at the EU level is now possible.

Transaction costs have been removed.

European firms can now avoid considerable costs as they do not have to cope with exchange rate fluctuations in most of their trading activities.

This brings added stability to businesses’ long-term planning, and provides for a more secure environment within the internal market, allowing firms to reduce their transaction costs and their hedging operations against exchange rate movements.

Because of the weight of the Euro area economy and the fact that the majority of trade takes place internally, the Euro area is far better equipped than Member States with their previous national currencies to withstand external economic shocks.

And thanks to the Euro, borrowers as well as investors can use deep and liquid capital markets without being exposed to exchange rate risks. Many tourists will no longer need to change currencies.

All these benefits will be particularly felt by Malta as the smallest but one of the most open EU economies.

The European Monetary Union has also been a success story with regard to growth and employment: in the nine years since the introduction of the Euro in 1999, 15 million of jobs have been created in the Euro area, whereas only 3 million had been created in the nine previous years.

The European Parliament pays much attention to consumer protection during the changeover phase. This means that consumers should be effectively protected against unjustified price increases in the course of the euro introduction. Otherwise public perception of the new currency could be damaged considerably.

I am confident that in the case of Malta unjustified price increases will be prevented. There was an exemplary information campaign, and many precautions have been taken to prevent cases of unjustified price increases.

Looking ahead, I feel confident that the following birthdays of the euro can be celebrated with even more members, and I am sure the participation of Malta in the EMU will bring further benefits to both new and old members and, moreover, will contribute to a strengthening of the euro area as a whole.

Entering monetary union is a historic undertaking.

It represents an irreversible step towards deeper economic integration within the Euro area; Malta is now part of what can be called a “Union with a common destiny”.

The stability and dynamism of the economy of Malta, and the welfare of its people, will be of a direct and immediate importance to all of us who share the single currency.

Similarly, the growth and prosperity of the euro area as a whole will be a matter of significant interest also for the people of Malta.

Just like the members of a family, all members of the euro area should discuss together and take the best course of action, for the benefit of each and of all.

Mr. President,

to join the Euro is not just a decision with economic and financial implications. I fully share what Helmut Kohl, one of the fathers of the Euro, said in this respect in nineteen ninety eight: “A currency is of course a means of payment and problems are monetary problems. But a currency is also far more than a means of payment. It has something to do with cultural identity and it is a measure of political stability. Imagine what a marvellous achievement it is that in Europe, with all our intelligence, creativity, and colourful variety, and in spite of all the difficulties, hundreds of million of our people should have a common currency.

Let me conclude by congratulating, Malta for this great achievement, to join EURO, our common currency.”

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