Four hours more

Maltastar

Four hours more

In less than four hours 2001 will be history and 2002 will be a current reality. Will it make any difference`

It will at least on two counts.

The Euro will become a tangible reality in the lives of the people of 12 EU members who have been using their national currencies in fixed parity with the Euro for three years.` This will be no earth-shaking innovation. The Euro has existed in the finance world for over three years and though it lost a lot of value against other major currencies it is considered as the second main international and reserve currency. Its loss of value is very much a reflection of the state of an economy struggling to consolidate its core whilst preparing to enlarge by the prospected inclusion of the less prosperous eastern countries that would eventually be expected to join the Euro monetary system.

Yet is will bring an existent reality closer to the daily lives of` some 250 million people as they use hard Euro notes and coin for their everyday purchases and as they start losing touch with the notes and coins of their hitherto national currency.

As Malta is not part of the Euro monetary system and is not expected so to be for at least another four years even if Malta were to join the EU in 2004, this could all have rather tangential interest for us.` Basically tourists will be bringing in their Euro notes and coins rather than their marks, their lire, their francs, pesetas, escudos, drachmas, schillings or what have you.` For our foreign exchange dealers this will be simplification rather than complication.

But it does not end there. It is time to ask whether the current basket of the Maltese lira is serving us well. I have said it many times and I repeat it again.` It is not! Malta must export before we can import and as are largely dependent on Euro countries and Britain for the value added of our exports it is time to consider either a fixed link with the Euro or a basket composed solely of Euro and Pound Sterling.

And there is great difference between` having a domestic currency in a fixed link with the Euro on one hand and` forming part of the Euro monetary system` on the other hand. In case of the former the fixed link is an internal decision which could be undone at our own choice if circumstances so dictate.` Forming part of the Euro monetary union means entering into a permanent arrangement where the domestic currency will be replaced by the Euro so that the flexibility of using the rate of exchange and monetary policies` as a tool of economic management is lost for forever and one is left simply with fiscal policy to fine tune the economy. Ask Argentina how difficult this could be at times of serious economic imbalances!

But what else will be different after next midnight. We would be able to say that this will be the last full year of a fatigued administration that lost control over economic management of the country and is only seeing wholesale privatisation as a means to buy some more time before being forced to address the consequence of their 15 year economic nonchalance.`

Nationalists, middle of the roaders and labourites largely agree on this analysis. Where they fall apart is whether Labour is in fact offering better and real solutions. On this score labour will have to do better in the run up to the next elections.