Malta registers second highest deficit in EU

Eurostat figures published yesterday show that Malta's deficit is the second highest in the European Union.

Publishing the second deficit and debt data for 2003, Eurostat said 16 member states saw a worsening of their deficit in relation to GDP in 2003.

The largest government deficits relative to GDP were recorded by the Czech Republic (-12.6 per cent), Malta (-9.7 per cent) and Cyprus (-6.4 per cent).

According to these statistics, Malta is also faring badly in the government debt to GDP ratio. Nine member states showed a ratio higher then 60 per cent of GDP in 2003. Greece tops the list with 109.9 per cent, followed by Italy, Belgium, Malta and Cyprus. The Maltese government debt as a percentage of GDP stands at 71.1 per cent.

But the biggest worry emerging from these new statistics is Greece. The Commission said that when compared to the data published last March, there had been a significant upward revision in this country's 2003 deficit.

The revised figures show that Greece, which joined the single currency in 2001, had a budget deficit of 4.1 per cent in 2000, revised up from two per cent. Under EU rules, a country attempting to join the euro must have a deficit of under three per cent.

Greece's revision, although made after several calls from the EU, is prompting debate on whether the statistics being provided by certain national statistics offices are correct and reliable.

Joachin Almunia, EU Commissioner for Economic and Monetary Affairs, said "the Greek revisions are of a size and scope that is causing real worries to the Commission".

He said the Commission insisted that the compilation and reporting of budgetary statistics was of vital importance to the credibility of budgetary surveillance. Eurostat had consistently raised questions about the quality of the Greek data in the past.

As a result it seems that the EU will be taking measures in the coming months in order to assure that the data received from national capitals is as accurate as possible.

A Commission spokesman told The Times that under the new constitution statistics will remain a national responsibility. It was therefore of utmost importance that the independence, integrity and accountability of the member states' national statistical institutions be reinforced in the future. The Commission would soon make proposals to that effect.