Brussels demands faster progress in reforms

The European Commission has urged the government to act more swiftly in introducing change to the areas of healthcare, competition and energy.

Deterioration on the fiscal side was also reported, particularly because of a bigger budget deficit, debt from a higher wage bill and a one-off cost related to the retirement scheme at the Malta Shipyards.

The Commission said the government has to translate policy changes into action more concretely.

Last year was not one of reform, the Commission says in its assessment of Malta's progress towards attaining important economic, fiscal and social targets by 2010, known as the Lisbon Strategy targets.

Healthcare was one of the areas singled out as being in need of improvement, a situation the Commission had emphasised in last year's report.

"A more ambitious reform of the healthcare system is needed. While the government's planned changes would allow for better resource utilisation and contribute to expenditure savings, the proposed reform seems inadequate, and progress in separating the regulation and delivery of the healthcare system has been limited," the Commission said.

Another alarm bell sounded by the EU executive concerns Malta's total dependency on oil for its energy requirements. The only other member state completely reliant on oil is Cyprus. In this sector, the Commission is pushing the government to act - the need for diversification is of "pressing urgency".

Brussels said actual progress to develop renewable energy was quite modest, despite the fact that solar energy and on-shore wind farms seemed to offer viable options for Malta.

"A thorough feasibility study on options for energy policy, including the connection to the European grid, was expected to be submitted to the government in spring but is still not ready," the report noted.

The decision process on new energy infrastructure investments had to be pushed forward, the Commission said.

Malta was also rapped on the lack of improvement in competition, and although a number of initiatives did take place in the past months, much more was needed.

The Commission is recommending that Malta contains inflation and maintains competitiveness, notably by reducing state aid and redirecting and reinforcing the Competition Authority.

The Commission's assessment and recommendations will be discussed by EU heads of governments during the spring summit in Brussels in March.