Alfred Sant contests EC statement that maltese economy is affected by large share of non-performing loans

In an urgent parliamentary question to the European Commission, Maltese MEP Alfred Sant has contested the European Commission’s statement that Malta’s economy is affected by a large share of non-performing loans.

This featured in the EC’s Communication on the 2018 European semester, published this week. According to the Commission, “a number of member states also continue to be affected by large shares of non-performing loans. Country specific recommendations are addressed to Bulgaria, Cyprus, Ireland, Italy and Malta in this sense”.

Loans held with banks on which interest and capital repayments are not being honoured are called non-performing (NPL) and have been a crucial problem with many major banks Europe-wide. Their elimination has been less than successful, which has held up progress in setting up a banking union within the eurozone.

Non-performing loans have been a vital point of concern in successive versions of the European semester. This is a process by which the European Commission comments about the economic and financial performance of member states. It then makes recommendations, called Country Specific Recommendations (CSRs), for future policy in each member state.

A general Communication from the Commission to the European Council presents an overall view of what member states are being asked to do in the CSRs. Concern about non-performing bank loans in Malta has not featured in Malta’s CSRs in recent years. Sant’s urgent parliamentary question asked the EC to explain why it has included this as a concern in this year’s general Communication, when the same point is totally absent in the Country Specific Recommendations addressed to Malta, also for this year.

Furthermore, in its economic analysis included in the March 2018 Country report, the Commission states that Malta’s good economic performance has also been reflected in the performance of the banking sector. It laid no stress on any risk related to NPLs in Malta, which stayed at around 3.7% of GDP.

The Maltese MEP noted that according to the European Banking Authority, the average of non-performing loans to GDP held by all European banks stood at 4% of GDP at the end of December 2017, higher than Malta’s.

He therefore asked the European Commission to clarify what it considers to be a “large” share of non-performing loans held by banks in any given country.

Under the procedure of an urgent parliamentary question, the Commission should give priority to the reply requested from it.

Maltese Version – ALFRED SANT JIKKONTESTA DIKJARAZZJONI TAL-KUMMISSJONI EWROPEA DWAR L-EKONOMIJA MALTIJA

F’Mistoqsija Parlamentari urġenti lill-Kummissjoni Ewropea Alfred Sant ikkontesta dikjarazzjoni tal-KE li l-ekonomija Maltija ġiet affettwata minn ‘non-performing loans’ (NPL). Dan wara li fil-Komunikazzjoni tas-Semestru Ewropew tal-2018 li ppubblikat din il-ġimgħa, il-KE qalet li “għadd ta’ stati membri tal-UE qed ikomplu jiġu affettwati minn ishma kbar ta’ ‘non-performing loans’. Rakkomandazzjonijet speċifiċi lil stati-membri kienu indirizzati lill-Bulgarija, Ċipru, l-Irlanda, l-Italja u Malta f’dan is-sens.”

Self mal-banek fejn l-imgħaxijiet dovuti u l-pagamenti li bihom il-kapital imsellef jitrodd lura lill-bank jissejħu ‘non-performing loans’ (NPL) u huma problema kruċjali għal banek ewlenin madwar id-dinja. Dan waqqaf il-progress biex titwaqqaf għaqda bankarja fiż-żona ewro.

‘Non-performing loans’ huma punt ta’ tħassib f’verżjonjiet suċċessivi tas-Semestru Ewropew. Dan huwa proċess fejn il-KE tikkummenta dwar l-andament ekonomiku u finanzjarju tal-istati membri tal-UE. Il-KE tagħmel rakkomandazzjonijiet lil kull stat membru tal-UE imsejħa Rakkomandazzjonijiet Speċifiċi għall-pajjiżi (CSRs).

Komunikazzjoni ġenerali mill-KE lill-Kunsill Ewropew turi dak li l-istati membri tal-UE ikunu mitluba jagħmlu f’dawn ir-rakkomandazzjonijiet (CSRs). Ma kien hemm l-ebda tħassib dwar ‘non-performing bank loans’ f’Malta fi snin riċenti. Il-Mistoqsija Parlamentari urġenti ta’ Sant titlob lill-KE tispjega għala inkludiet dan bħala tħassib fil-Komunikazzjoni ta’ dis-sena, meta l-istess punt ma jidher imkien fir-Rakkomandazzjoni Speċifika indirizzata lil Malta ta’ din is-sena.

Barra minn hekk, fl-analiżi ekonomika fir-rapport ta’ Marzu 2018, il-KE qalet li l-andament ekonomiku tajjeb ta’ Malta jinsab rifless fis-settur bankarju. Il-KE enfasizzat li ma hemm l-ebda riskji marbuta man-‘non-performing loans’ f’Malta li huwa 3.7% tal-Prodott Gross Nazzjonali.

L-MEP Malti qal li skond l-Awtorita` Bankarja Ewropea (EBA), il-medja ta’ ‘non-performing loans’ tal-banek Ewropej hija 4% tal-Prodott Gross Nazzjonali, ogħla minn dik ta’ Malta.

Għalhekk Sant talab lill-KE tikkjarifika x’tikkonsidra li jkun sehem “kbir” ta’ ‘non-performing loans’ tal-banek fil-pajjiżi tal-UE.

Skont il-proċedura ta’ Mistoqsija Parlamentari urġenti, il-Kummissjoni Ewropea hija marbuta li tirrispondi bi prijorita` l-intervent ta’ Alfred Sant.