Malta may have not been hit as hard as other countries by the economic downturn abroad, at least up to now, but news from Brussels about the island's finances and outlook are far from cheerful. This newspaper has already commented about this on Tuesday, but the implications of the European Commission's spring forecast well justifies taking a second look at its analysis. Put briefly, the 16-nation euro area economy is now expected to contract by four per cent this year and by 1.9 per cent next year. The commission now expects the EU economy to broadly stabilise on support measures in 2010 after experiencing the deepest recession in the post-war era this year.

The bad news for Malta is that the Commission is forecasting that the islands will remain in recession, and that, contrary to local expectations of growth, even if minimal, the economy is expected to contract by 0.9 per cent, far lower than the EU average. The deficit in government finances has taken a turn for the worse and the Commission is now recommending the start of an excessive deficit procedure against Malta. All this is now expected to add further spice to the political debate over the deficit as the two parties continue to disagree over the best course to take to meet the difficulties.

Political squabbling is par for the course in normal circumstances, but considering the minuscule size of the islands, would it not be profitable if a measure of consensus were to be reached on the best way forward in the drive to contain the impact of the downturn on the economy? The government may have been over-optimistic when it drew up the budget for this year, but, again, Malta is not the only country that has gone wrong in its deficit and growth forecasts. This appears to matter very little to the Labour Party, whose leader has gone so far as advising the government to draw up a mini-budget. Labour Party finance spokesmen lost no time in trying to turn the matter into a hot political issue, arguing, dismissively and superficially, that the government had deceived the public when it presented the estimates and the revised projects for last year.

Every government tends to downplay unpleasant circumstances in times close to general elections, but this was not the case when the Finance Minister presented his budget for this year. He had no reason to deceive the public. Neither the Prime Minister, Lawrence Gonzi, nor the Finance Minister, Tonio Fenech, appears ready to allow the Labour leader to play to the gallery at a time when the going is so tough. They are both insisting, quite rightly, that the government's priority is to help save jobs as much as possible. It has already done this through direct help to firms passing through difficulties.

One may not agree entirely with the thrust of Labour's arguments, and its criticism would be listened to more attentively if it were shorn of its over-eagerness to score political goals all the time, but one point the party made that is worth taking up is its call on the government to control recurrent expenditure, particularly if it has already drawn up a chart showing where and how this can be done. If this has already been done, the exercise would need to be exhumed, as it were, and the details be repeatedly given in public. This will be one way in which Labour can win credibility when criticising the government on its finances.