Malta the largest contributor to Greek bailout
Speaking in Parliament, finance minister Edward Scicluna explained that Malta's share in the Greek bailout amounted to 3% of its GDP, making Malta the largest contributor out of the European Union member states.
Following a number of amendments to the 2010 agreement which granted Greece an €80 billion bailout through the European Central Bank, the repayment period was extended from the original five years to 30. Mr. Scicluna said that Malta had paid €50.6 million out of its €74.5 million commitment.
"The situation is this, we are paying more interest over the money we borrowed to honour the bailout commitment than we will earn from the interests which Greece will pay us. We are paying €369,000 annually in interests, meaning that over 30 years we will pay €200 million which is equivalent to 3% of our GDP," said Mr. Scicluna.
"This is the highest rate in the EU27, with the European powerhouse paying 2.2% of its GDP. Its not a matter of being proud of our contribution but we must demand equal treatment," added Mr. Scicluna.
The €80 billion bailout approved in May 2010 saw Malta lending Greece €50.6 million in a bilateral agreement. In May 2010, the Maltese Parliament ratified the EU bailout agreement which set a 3.7% interest in the first three years and 4% in the following years.
The agreement was intended to span over five years with a three year grace period. However, one year later the rate was decreased to 2% in the first three years and 3% in the following years, the maturity period was extended from five to 10 years, and the grace period was extended by one year. Last year the interest rate was reduced to 1.5% and the grace period was extended to 10 and the payment period to 15 years.
But that was not the end: this year a third amendment to the agreement was reached and the interest rate went down to 0.5% and the repayment period extended to 30 years. Both parties in the Maltese Parliament have yet been to ratify the new agreement. ■