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 | Professor Lino Briguglio delivers his lecture at USP. |
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A public lecture was delivered by Professor Lino Briguglio, during his visit to the University of the South Pacific in Suva on 29 January, 2013.
The lecture on ‘Euro in Crisis: The Historical Background, Causes and Prospects’was hosted by the University’s School of Economics in the Faculty of Business and Economics.
Professor Briguglio, the former Head of the Economics Department and the Banking and Finance Department of the University of Malta, currently directs the Islands and Small States Institute of the University of Malta.
Professor Briguglio has a distinguished career on the global stage. He has acted as consultant for several international organisations and has represented the Maltese Government in many United Nations meetings, including the UN Global Conference on the Sustainable Development of Small Island States and the World Summit for Sustainable Development.
In his presentation, he talked about the European sovereign debt crisis, an ongoing financial crisis faced by some countries in the Eurozone.
The crisis, explained Professor Briguglio resulted from a combination of complex factors. These included:
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The globalization process leading to increased possibilities of contagion;
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Lack of regulation on credit conditions, encouraging high-risk lending and borrowing, as was the case of Ireland;
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Real estate speculation leading to bubbles;
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Slow economic growth and recessions in 2008-2009, as was the case of Italy and Portugal;
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Lack of fiscal prudence as in the case of Greece; and
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Circumventing of rules and hiding deficits and debt levels as evident in the case of Greece and Italy.
One reality that has emerged from the recent Euro crisis, pointed out Professor Briguglio,is that indiscipline and defaults can also happen in advanced countries.
“The Euro crisis has served to expose countries that behave badly by living beyond their means. It may yet serve as a catalyst for a more unified Europe,” he added.
His lecture outlined measures that are being taken within the EU to strengthen the European and Monetary Union and to create fiscal harmonization within the 17 members of the Eurozone.
This involved a renewed emphasis on ensuring that all members of the Eurozone abide by the terms of the Stability and Growth Pact, a political agreement which was reached by the European Council in December 1996, aimed at imposing discipline in the government finances of member states.
Professor Briguglio mentioned that the agreement binds all members of the Euro area to implement the so-called excessive deficit procedure if they do not meet the provisions of the Pact.
He further elaborated that as a reaction to the Euro crisis, in 2011, the European Parliament passed a series of six budget laws called the “Six-Pack Reform” to impose stricter implementation of the Stability and Growth Pact.
Those present also heard about the history and institutions of the EU and were given further insight into the economies of its 27 member states.
The seminar was attended by representatives of regional and international organisations, government officers, practitioners in the fields of economics and finance as well as the USP community and members of the public.
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