The European Commission has recommended that the European Council remove Malta from the Excessive Deficit Procedure, following what the Maltese Government described as a strong improvement in the country’s public finances.
According to the Government, Malta reduced its deficit to 2.2% of Gross Domestic Product during the previous year, allowing the country to achieve its agreed fiscal targets with the European Commission earlier than expected. The statement noted that the improvement was “far greater than agreed” with European institutions.
Government figures also highlighted that the average deficit across the European Union currently stands at 3.1% of GDP, according to EUROSTAT. Malta’s deficit therefore remains below the EU average despite the country collecting less tax revenue proportionally than many other European states.
The statement compared Malta’s position with several EU countries that recorded deficits at or above the 3% threshold, including Belgium, France, Italy, Austria, Poland, Romania, Slovakia and Finland. It also noted that Bulgaria and Croatia exceeded the European limit for the first time last year.
The Government attributed the reduction in the deficit to economic growth rather than austerity measures. It said the result was achieved while maintaining energy price stability, implementing what it described as “the largest tax cut in Malta’s history,” and increasing pensions and social benefits.
The Commission also projected further improvements in Malta’s public finances in the coming years. The Government said this economic performance will support the implementation of its electoral programme following the recent general election.
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