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- no honeymoon period as Malta joins EU
David Lindsay
Malta and five other accession countries - Poland, the Czech Republic, Hungary, Slovakia and Cyprus - will be placed under budgetary surveillance because their deficits breach the EU limit of three percent of gross domestic product, European Commission has said.
Figures issued through a new statistical approach – the European Commission’s Excessive Debt Procedure - released last month show that government deficit and debt both fall well short of the Maastricht criteria, which measures the sustainability of governments’ financial position.
In terms of government deficit to gross domestic product ratio Malta’s position as at the end of last year standing at 9.7 per cent, far above the Maastricht criteria’s ceiling of three per cent.
Government’s gross consolidated debt to gross domestic product ratio, meanwhile, worsened considerably last year and rose from 61.7 per cent in 2002 to a whopping 72 per cent at the end of 2003. The Maastricht criteria’s cut off line for ‘excessive debt’ is the 60 per cent level.
However, the Commission added that Malta and the five others will be allowed to run excessive deficits for a longer period than current euro zone members to avoid jeopardising their economic and social stability.
As opposed to the situation applicable to Spain and Portugal, both of which joined the EU 1986, there will be no "period of grace" before the European Commission starts legal action to enforce the implementation of EU law among the bloc's biggest ever single intake.
Malta will be expected to apply all 80,000 pages of regulations known as the "acquis communautaire" from day one, except in areas where it negotiated a transitional period during their accession talks.
"If there are clear cases of non-implementation or wrong implementation of community law, the Commission must act and will act," EU Enlargement Commissioner Guenter Verheugen told Reuters in a recent interview.
Madrid and Lisbon had been accorded an informal two-year “honeymoon” before the EU executive launched its first "infringement procedures" against them.
However, Verheugen comments, "The new member states should not expect such a period of grace because we have prepared them rigorously... using a completely new methodology. Therefore it is not comparable with previous rounds of accession."
Where necessary, the Commission would use safeguard clauses in the accession treaty to protect the EU's internal market or start infringement procedures immediately, Verheugen said.
Several new member states may not receive EU farm subsidies from day one because their agricultural payments agencies do not meet Brussels' tough requirements, Verheugen said.
Infringement procedures can target a multitude of regulation violations from illegal state aid to industry to failure to apply EU tax, open market, competition, environment, transport, agriculture and energy rules.
Some early cases may concern state aid and competition issues involving privatised heavy industries.
Under the procedure, Brussels first writes to a member state pointing out an apparent breach in applying EU law and asks for an explanation or rectification.
If the answer is unsatisfactory, the EU executive sends the country a "reasoned opinion", which is a final legal warning before taking it to the European Court of Justice.
The procedure can last years and is used frequently against existing members. Only a fraction of cases end up in court.
The Commission approved 1 400 infringement measures on a range of issues in a single day on March 30, including a "reasoned opinion" threatening Germany with court action over its law on the ownership of car giant Volkswagen.
New members will no longer be subject to any special monitoring from Brussels after they join, but they will face the same permanent scrutiny as existing member states.
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