Malta’s public finances have been given a clean bill of health, as EU finance ministers yesterday approved a European Commission recommendation saying the island had reined in its deficit by the end of 2011.

At the end of its monthly meeting, the Economic and Financial Affairs Council (Ecofin) said on the basis of information available, it appeared Maltese authorities had taken effective action towards “a timely and sustainable correction” of the excessive deficit.

“In particular, Maltese authorities adopted a 2012 budget including a series of measures to contain the deficit,” the ministers agreed.

“In view of the above assessment, the Commission considers that no further steps in the excessive deficit procedure of Malta are needed at present.”

Malta was one of only two member states in the EU to lower its deficit last year.

The Commission had started legal procedures against Malta in 2009 after the island had hit a deficit of 4.8 per cent of GDP by the end of 2008, largely due to the restructuring of Malta Shipyards and the effects of the global recession.

The EU had given Malta until the end of 2011 to bring its deficit down to under three per cent of GDP.

According to the 2012 budget estimates, Malta is expected to close 2011 with a deficit of 2.8 per cent and to lower it further to 2.3 per cent and then 1.8 per cent over the next two years.

Asked when the Excessive Deficit Procedure against Malta was expected to be lifted, the sources said this would only be done once the full financial results of all member states are published by Eurostat, probably at the end of March.