Source: Anna Golis¸ PKF Malta¸ March 2014

Malta and Poland were two out of ten countries¸ which joined European Union in May 2004. From this time¸ Malta managed to implement euro currency in January 2008 and Poland is still striving with that. How does the life in Malta look like nowadays after joining eurozone and which lesson can Poland learn from its experience? The main purpose of this article is to present the comparison of economic indicators due to fulfilling convergence criteria¸ cost of living and quality of life in both countries.

To understand better the path¸ which presented countries were passing¸ some economic indicators from 2004 need to be shown. While entering European Union¸ both countries didn’t fulfill euro convergence criteria. (1) The average inflation rate in Malta during the 12 months to August 2004 was 2.6 %. It means that Malta did not fulfill the criterion on price stability. (2) The general government deficit was 9.7 % of GDP in 2003 and (3) government debt was 71.1 % of GDP. Malta did not fulfill the criterion on the government budgetary position. (4) The Maltese lira¸ which was pegged to a basket of currencies in which the euro has a weight of 70 %¸ was not participating in ERM II. Malta did not fulfill the exchange rate criterion. (5) The average long-term interest rate in Malta in the year to August 2004 was 4.7 % and Malta fulfils the criterion on the convergence of long-term interest rates. In the same time situation in Poland looked as follows: (1) the average inflation rate in Poland during the 12 months to August 2004 was 2.5 % – Poland did not fulfill the criterion on price stability; (2) the general government deficit was 3.9 % of GDP in 2003¸ (3) while government debt was 45.4 % of GDP – Poland did not fulfill the criterion on the government budgetary position (even if the government debt was acceptable); (4) the Polish zloty was not participating in ERM II and was left floating with the central bank abstaining from currency interventions – Poland did not fulfill the exchange rate criterion; (5) the average long-term interest rate in Poland in the year to August 2004 was 6.9 % and Poland did not fulfill the criterion on the convergence of long-term interest rates.

Key convergence indicatorscountry	Malta (MT)	Poland (PL)	Reference Value	Fulfill criteria
				MT	PL
Average Inflation Rate (08.2004)	2.6%	2.5%	2.4%	no	<p align=”center