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Monday, July 23, 2012, 11:27

Malta's national debt jumps to 75% of GDP

Malta's national debt within a year rose to 75% of GDP in the first quarter from 70.5% in the same quarter last year, according to data issued this morning by Eurostat, the EU's statistical arm.

In the Budget Speech, Finance Minister Tonio Fenech had projected the debt to be 68.9% of GDP by the end of this year.

Eurostat said that at the end of the first quarter of 2012, the debt to GDP ratio in the euro area (EA17) stood at 88.2%, compared with 87.3% at the end of the fourth quarter of 2011.

In the EU27, the ratio increased from 82.5% to 83.4%. 

The highest ratios of government debt to GDP at the end of the first quarter of 2012 were recorded in Greece (132.4%), Italy (123.3%), Portugal (111.7%) and Ireland (108.5%), and the lowest in Estonia (6.6%), Bulgaria (16.7%) and Luxembourg (20.9%).

Compared with the fourth quarter of 2011, twenty-one Member States registered an increase in their debt to GDP ratio at the end of the first quarter of 2012, and six a decrease. The highest increases in the ratio were recorded in Lithuania (+4.0 percentage points - pp), Portugal (+3.8 pp), Spain (+3.7 pp) and Belgium (+3.6 pp), and the largest decreases in Greece (-33.0 pp), Hungary (-1.8 pp) and Denmark (-1.5 pp). It should be noted that the change in debt ratio between two successive quarters can be influenced in some cases by seasonal patterns.

Compared with the first quarter of 2011, twenty-three Member States registered an increase in their debt to GDP ratio at the end of the first quarter of 2012, and four a decrease. The highest increases in the ratio were recorded in Portugal (+17.2 pp), Cyprus (+11.0 pp) and Ireland (+8.2 pp), and the largest decreases in Greece6 (-20.0 pp) and Hungary (-4.1 pp).

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Eddy Privitera

Jul 24th 2012, 21:25

John Azzopardi Surely no government can govern in an irresponsible way more than this GonziPn one !

Ronnie Callus

Jul 24th 2012, 09:41

@ Schembri Ray:
Hundred percent correct what you wrote. They must be kept responsible for all this, because many times have been warned about the situation, but they took us for a ride. All their assets should be kept for the debt incurred ( which we know) and others which are hidden in the books. For sure there are a lot of contractors which are still not fully paid. A case in point is the New Power Station and more others for sure. Dr.Joseph Muscat should see all about this before he takes over. This is going to be worse than when Mintoff took over governance from the PN and found no money to pay the civil servants. Thanks God he found 'Gaddafi, to help him, but now I wonder whom it could be.

Ronnie Callus

Jul 23rd 2012, 21:55

@ Irene Forster:
Fully agree with you Ms.Irene Forster. Us taxpayers wants to know exactly where we stand because since the PN governments, during the Budget speech no mention of each department outcome ( good or bad) was given to us. During Dom. Mintoff we used to hear each department gain or loss during the financial year and we were given a clear picture where each department stands. Nowadays no accountability what's so ever has been kept and us as you stated were and continued being treated as imbeciles or worse !! without being noticed or heard by Dr.Gonzi and Tonio Fenech who are responsible for the spending and Budget formation. If one had to fetch in the archives one will find when Mintoff took over from the PN he found no money to pay the civil servants ( government employees) and now it seems that we are much worse with all this huge National Debt and Deficit. They both must be held responsible for all this mess because their attention was drawn many times and no notice given. POOR TAXPAYERS.

Tony Borg

Jul 24th 2012, 08:07

Very well said and explained too.

ANTHONY PAVIA

Jul 23rd 2012, 18:03

The debt mountain has been created by successive PN governments that were not able to create sufficient productive, private sector employment to absorb the gross underemployment within the public sector. Please avoid degrading the debate and showing your naiveness and kindly spare me the innate statement that it is all due to KMB's infamous 8,000 (most of those were already employed within the larger public sector, not that this made that action correct). Anyway, and more importantly, that was 25 years ago and successive Nationalist Governments had the amplest of time to steer the economy away from the all devouring, huge public sector monster. Jobs for boys has ruined the economy!

Edmond Micallef

Jul 23rd 2012, 21:44

To Cesco di Luigi and Anthony Pavia

Agree with you both, you are very much on the same wavelengths.

In 25 years, the Germans managed to re-built Germany from the ruins and shambles of World War II whilst in Malta we are still hearing the deceitful mentioning the 8000 jobs and the toothpaste-less era!

But, for the present administration and the ones before it, the millions of Euros squandered and channeled into the pockets of the same exclusive circle of friends is not to be discussed in public. According to their mischievous reasoning, when they do not want accountability, they label their dealings as sensitive information of a commercial nature.

Luke Scicluna

Jul 23rd 2012, 17:04

Downhill - last year, our national debt was equal to 70% of our total income as a country - this year, it's equal to 75%.

Johnny Xerri

Jul 23rd 2012, 20:09

it means that 75% of what we produce is actually debt.

In short it means that if we produce €1 worth of goods...only €0.25c is ours...the rest is money due to be paid to the bond holders.

This implies that soon...very soon...the coupon (interest being paid on the debt) will soon be too large and result in a great burden on society. Having around 5% of the gdp being eaten away as interest is no joke.

If the debt originated from justified investments it would not be such a prob...however, when one considers that each an every project is wastefully over budget such as the; Mater Dei hospital, enemalta power station etc...it is very serious

Gordon Farrugia

Jul 23rd 2012, 16:34

hello? those 'investors' aren't getting that great a return mind u!

cesco di luigi

Jul 23rd 2012, 17:32

first of all I don't agree that it's such a limited amount of investors at all, and secondly if things get worse...as it seems they are.. the value of those bonds will decline....so maybe, NOT such a good investment after all..

Barney Camilleri

Jul 23rd 2012, 15:49

Jesmond
How true, well said. That is why at this point in time all energy and sources should be calling a spade a spade, that this government while he says he has not enough time for local matter we the people with the opposition must stand up and call for a New Spring here too.
Experience has it that no one will pay this imbalance of payment but the middle and anyone else below that level, those with money know how to cover themselves.

cesco di luigi

Jul 23rd 2012, 17:32

Agree 100%

Jesmond Chetcuti

Jul 23rd 2012, 15:42

Paul,
The truth is,that it is almost too late now.To try and patch the situation alot of sacrifices need to be done. Social services slashed to the bone, pensionable age increased again, taxation increased etc..
what is not going to help us is the currency, if we still had the Lira, and if as the government says , its debt is internal, devaluation of the currency would help for the short term.,but with the Euro we are stuck.
Lest hope that the situation in Europe creates a two tier Euro, a strong one for the northern hemisphere countries and a weaker one for the others like Greece, Italy ,Spain and ourselves. In that way we will be competitive again and through devaluation the percentage of the debt will go down.
But it is a long and painful road, unfortunately it is the one that Joseph has to take to save this country.

GL Calleja

Jul 23rd 2012, 14:32

Also, does this include the almost 200,000,000 million euro bail out for Air Malta? Well they can reason that they are saving a lot of money by not putting a roof on the Topless Opera House?

M. Spiteri

Jul 23rd 2012, 15:39

the new parliament and theatre are excluded from this figure, as an SPV company was created to hide this from the national accounts.

m. borg (slm)

Jul 23rd 2012, 15:13

Wrong Mr Brincat, Par Idejn Sodi was the illusion that gonzi can govern without hiccups, as regards the local debt it was "FINANZI FIS-SOD"

You can see how they love using sod or sodi.

R Axisa

Jul 23rd 2012, 13:54

issa ibda zomm nota halli meta jasal iz-zmien tkun tista' tqabbel!

M Cassar

Jul 23rd 2012, 13:58

Very sweet economic arguments. When one cannot justify the deterioration in public finances, just blame the people for having high expectations. I wonder which economics faculty has come up with this theory.

M Grima

Jul 23rd 2012, 14:47

Kemm int brava Carmen. Tista tghidli ghalfejn il-poplu jhallas it-taxxi? Jekk ma tafx dan ihallas ghall dawk l-istess affarijiet li int semmejt li suppost huma DRITT u mhux xi privilegg. Jekk jitla il PL l-ewwel irrid isewwi l-ingustizzji u il-hniezrijiet li ghamel GonziPN.

Mr Stephen Borg

Jul 23rd 2012, 15:39

Yes you can also add the 14300 yearly to the Maltese representative to the EU, a power station commissioned to operate on HFO that before starting to operate will now be converted to operate using gas, something that many experts have been telling the government for months. The tenders which end up in over expenditure because of improper supervision ans contract clauses. This is what you should have written.

carmen delia

Jul 23rd 2012, 16:01

M Cassar
xejn ma jigi b'xejn. nahseb l-ebda economics faculty ma tinnegah dan . Il-gvern m'ghandux flus tieghu, izjed ma rriduh jonfoq izjed ikollu jigbor jew jiddejjen.

M Grima
Id-drittijiet u il-privilleggi ghandhom prezz ukoll u minn x'imkien irridu jithallsu. Jew it-taxpayer jghamel tajjeb ghalihom jew il gvern izid id-dejn.

Rocco Camilleri

Jul 23rd 2012, 17:31

@ carmen delia;
Tista tghidli dan x'irraggunar hu tieghek ?? Mela int lit-tfal kulma jitolbuk tikkontenthom, jew l-ewwel tara sa' fejn twassal ?? ghax hekk int qed tghamel hekk zgur b'id wahda wara u l-ohra quddiem gabhuk kif ninstabu ahna bhala pajjiz. L-ewwel mhu qed ihossa z-zghir ghax il-kbir haseb ghaliha biz-zjieda tal- 500 euro fil-gimgha. Ara int u jien 1.16 euro hadna lanqas haqq cikkulata, barra li hadhomna mill-ewwel, ghax b'wahdi jtik u bl-ohra jehodlok. ALLA j'hares Carmen, IMMA TRID TGHIN RUHEK biex Alla jghinnek.

Gordon Farrugia

Jul 23rd 2012, 14:19

Joe why did you mention the LP? The NP has been in power for close to 25 years. When the LP were in power we had a surplus (I'm willing to sacrifice the chocolate and be net positive!)

Ronnie Callus

Jul 23rd 2012, 16:18

@ Gordon Farrugia.
Well answered Joe Naudi, how comes that Joe Naudi included the LP (ex-MLP) when the Party had left a surplus of LM 500,000,000 Maltese liri not euro in Malta's account. The MLP did things in priority and never over spent more than it has got as in the case of the 'TOP Less Theatre and Parliament' apart from the other projects if one can call them so ! still in debt. One has not to forget to mention the new Power Station which still has to be made good by ourselves for it's huge debts. The PN used to mention the shortage of chocolate as if we were living on chocolate.

Joseph Borg

Jul 23rd 2012, 13:56

Ha nsaqsik jiena l istess mistoqsija bil maqlub tajjeb? SInce there is such a mess (kif ghedt inti stess fl ewwel sentenza u kif jghid tajjeb dan l artiklu) Do we have a guarantee that PN will not go for what you are alleging the PL will do once they are in govt?

Tipprovax titfa ta tieghek fuq ta hadddiehor jghid l Malti! Gvern li l ewwel priorita huwa Parlament, Tejatru bla saqaf, Smart City ghal Fatati, Powerstation bil HFO ma tantx huwa gvern li jispirak fiducja nahseb....u dan dejjem excluding it tahwid galore gol partit tieghu stess!

Jekk qed jitrenjak PBO ghal canvasser ghad baqalu hafna x jaghlmek ghax dan d diskors ma ser iezza lill hadd habib!

A M Bonello

Jul 23rd 2012, 14:44

Well I'm just speculating a Labour victory,which is what the polls indicate what's really wanted by the majority so far (and why not) however it doesn't really make much difference whom ever is in power any more Mr J Borg,habib, since fiscal discipline will come from the E.U.
Who's PBO?May you point out any good things the PN has done please?Do you want the Malta out of the EU so we can move on into another age?

Ronnie Callus

Jul 23rd 2012, 16:43

A.M. Bonello:
Minthiex tahseb li issa d-dejn se' jhallsu Joe Muscat hux u mhux il-poplu !! Il-Pajjiz gie f'fiex gie bit-tmexxijja hazina u habi lil poplu tal-finanzi, bhal fil-kas taz-zjieda tal-500 euro fil-gimgha minn fuqek u fuqna Sur.Bonello. Li kieku kont flok Joseph l-ewwel ma' nzomm responsabbli hu lil min kien fit-tmexxija u lil dawk kollha li qablu mieghu biex isir dan. U mela tigi tistaqsi x'se jghamel Joseph qiesu qed tipprettendi li ghandu xi bakketta magika. Nghidlek wahda BISS jekk Joseph jirnexxielu jnaqqas din il-hela ta' flus f'konsulenti, proggetti li ma' jrendhux hlief li haddmu xi erba tal-qalba u Taxxa li suppost tithallas minn min ghandu jhallas ( qed nirreferi ghal dawk li ma' jghatux ircevuta u ohrajn li jiddikjaraw baxx imbaghad tarahom b'xi jottijiet etc; etc;) Nahseb Sur Bonello ahjar taghti parir lil Gonzi u lil Tonio Fenech rigward din il-kwistjoni ! qabel jigrilna bhall Grecja., Spanja, l-Irlanda ( li tghidtx kemm ftahru biha li ghamlet progress) u ohrajn. Anzi jien niftakar lil xi hadd jghidilna 'LI XEJN MHU B'XEJN' u dan wara li xbajna nhallsu bolla u Income Tax u VAT li minn 15% gholiet ghal 18% suppost biex tghamel tajjeb ghal Health System li semmejt int. Nkunu Kredibbli jekk jogghbok man-nies.

Jonathan Camilleri

Jul 23rd 2012, 13:38

"In order to stop unemployment, it is no longer the market forces that decide the income of some people, but he who decides how to distribute any amount of printed money in Brussels or the local Government. These are normally the Governments in association with the Banks. They can generate money through printing the money, loan it or gain it from other people or other countries or other banks, or local people through taxes and bonds and then to circulate money locally to minimise unemployment artificially, with a dollop of market forces which enable some of the people to make a meagre living."

I would like to point out that irresponsible printing of money risks leading to inflation and hyperinflation, and, thus not increasing any purchasing power whatsoever to the meagre people.

Pule' Carmel

Jul 23rd 2012, 14:01

Where are the overpaid, Economists, Accountants, The MBA boys, The Bank Managers, the Arts boys, the court of Justice, Religions and the entertainers and other socially oriented personnel to solve this probelm?
Probably they are all preparing public speaches and looking for engineers to tell them something to the effect "................... we have to increase productivity if the salaries are to go up.., the workers need to seek new productive means for new high added value products or services..............." while their equivalent at Brussels, the European Parliament and European court keep on printing their own money and voting for their own salaries! Our poor children, I was so gullible when I was so young. I should have been a criminal as these people are when you come to think how they rob us for their benefits. They even make their own pensions different from ours just in case the Euro depreciates, where they will be better off even in their retirement! This is the epitomee of immorality and no religion says anything to these people!! NOt the Local courts, for it is highway robbery of the working class, no other wasy to describe it.

A M Bonello

Jul 23rd 2012, 13:30

When the compound interest hits all of us borrowers in the foreseeable future our days of restaurant spending could diminish.We wont exactly be welcoming the domino effect.At the end of the day we and future generations will have to fork the bill.

Karm Lughermo

Jul 23rd 2012, 13:32

And what about all those people who cannot afford such luxuries as going out to eat in restaurants on weekends? Ever thought about them???

Ronnie Callus

Jul 23rd 2012, 13:37

@ Ian Mamo:
Are you guaging Malta's debt with seeing once a weekend the restaurants full. You better ask them how they run during the week, because for sure you are not being paid once a week???? . Also if it was not this case we would have been much worse with regards to our economy provided that there are noone doing like the Government earn it and eat it because tomorrow may not come or much worse digging deeper the borehole.

John L Galea

Jul 23rd 2012, 13:39

Politics aside?......pull my other leg please.

So because people entertain themselves during the weekend, for you everything is clockwork and this is just a made-up piece of news or frameup (latest Gonzi buzzword). If you go to Greece and Italy, you also see restaurants full of people, so there are no problems over there either according to your intelligent reasoning.

R Axisa

Jul 23rd 2012, 13:40

Dak ifisser kemm qed nidhku bina nfusna! Ghax qed naraw ix-xinxilli u m'ahniex naghtu kas tal-problemi aktar serji. U b'daqshekk ma jfissirx li l-problema tad-dejn nazzjonali mhux qeghda hemm!

Mario Camilleri

Jul 23rd 2012, 14:07

@Ian Mamo,

Tell it to the Greeks, Spaniards, Italians, Portuguese, French and Cypriots amongst others. That's how they use to enjoy their time and life until they were hit by the real crisis, and that came unfortunately after the laughing, għax kif ngħidu bil-malti "wara d-daħk jiġi l-biki"!! U issa n-nies qed iħallsu, mhux min għaddihom biż-żmien, dawk komdi għax ħobżhom maħbuż!!

Wally Vella-Zarb

Jul 23rd 2012, 14:16

Did you ever realise that, all things considered, it is usually cheaper to go out and have a pizza in a 'restaurant' than to bake one at home?

Eddy Privitera

Jul 23rd 2012, 16:03

Ian Mamo: Did you learn this from Giovann DeMartino ??? Certainly, you couldn't see the hundreds of thousands who cannot afford to go out and eat in a restaurant, because they were at home !!!

Also, you can never see those who find it hard to even give some lunch to their children when they send them to school !!! This is happening and was said by Mons- Victor Grech and other Caritas officials !!!

In Mosta Square there are two persons who BEG, almost every day !

Ian Mamo

Jul 23rd 2012, 13:39

Jekk giet moghtija l ghajnuna lilnha, nghinu irridu!

Ronnie Callus

Jul 23rd 2012, 16:58

@ Ian Mamo:
Tista tghidilna daqsxejn x'ghajnuna inghatat lilna meta ahna qed nghatu ma' nafx kemm !! ghax qatt ma' qalulna lil EU???????

Ian Mamo

Jul 23rd 2012, 17:07

Sinjal li m'ghandek idea xinu jigri filkaz Mr Callus..... Ghax kien hawn hafna funds min EU!!!!

Wally Vella-Zarb

Jul 23rd 2012, 14:20

"we have not played fool with public money"???

No, WE - the people - haven't; unfortunately the same cannot be said of this government.


m. borg (slm)

Jul 23rd 2012, 15:15

Why keep using other countries woes to cover our own.

We live in Malta and give a muck about Malta, not Greece, Spain , Portugal or wherever.

Grow up and talk about the local situation which is certainly bleak.

m. borg (slm)

Jul 23rd 2012, 15:17

Of course we do and even remember "Money No Problem" which presently has changed to "Problem No Money".

Ronnie Callus

Jul 23rd 2012, 13:17

@ victor bonello:
Fully agree with you as well a lot of others do. We are being taken for a ride byh Dr.Gonzi and Dr.Tonio Fenech. They always proclaimed to us that the Defecit and National debt are being reduced, but as one sees year in year out it is always on the increase. Dr.Joseph Muscat must hold responsible both Dr.Gonzi and Dr.Tonio Fenech for this debth because they always declared to us voters that the debt is being decreased which infact results the otherway round year IN year out. They lost the credibility of most and if things are going to be kept on these lines we are going to crash soon One hopes that this issue is taken seriously by the goverment and not point out his fingers towards the LP. In 25 years time Malta was dragged to its' knees or even to the ground. Where are the 'FINANZI FIS-SOD' jew 'IL-PAR IDEJN SODI. Probably both Dr.Gonzi and Dr.Tonio Fenech are going to tell us that there is an error in the figures published (the usual song). Malta as a whole Nationalists and Labourites are going to suffer because this negative patch has to be filled from our pockets, but as stated above one has to be kept responsabile for this mess. The PN should not dump problems created by his administration to a new one and left going scotch free.

Jay Grimaldi

Jul 23rd 2012, 13:03

They would never explain that to the General Public. Why should they say the truth ? ......

Antoine Psaila

Jul 23rd 2012, 13:41

Mela issa nhallu r-regim ta gonziPN ikompli jberbaq il flus b'laddocc f'affarijiet li minnhom il-poplu mhu ha jiehu xejn bhal parlament il gdid. Ghalinqas il-vat tal-karozzi, il kontijiet tad-dawl u ilma, il petrol u diesel, income tax(li weghdna it-tieni PM ghax l-ewwel huwa JPO), l-istipendji u l-affarijiet l-ohra li semmejt se jgawdi minnhom kulhadd mhux in-nies tal-klikka li bhalissa qeghdin hemm ghalxejn.

R Axisa

Jul 23rd 2012, 13:43

U jekk diga' qeghdin gol-hajt!!!! Il-figuri t'hawn fuq jitkellmu wahedhom!

John L Galea

Jul 24th 2012, 07:38

@John Borg: Qed tikkritika l-Labour meta aghar minn kif qeghdin zgur ma nistghux inkunu. S'issa li nistghu nghidu hu fuq il-prestazzjoni tal-PN wara 25sena tmexxija. Huma dahhluna gol-hajt diga u kuljum qed inhaffru qiegh gdid. Ghallinqas jekk jitla l-Labour u kif qal JM m'hemmx weghdi imma proposti sostenibbli, ghallinqas forsi jaqlana minn gol-hajt li dahhalna fih Gonzi tieghek.

John L Galea

Jul 23rd 2012, 13:32

Can you tell us what else JM can do? And by the way isn't JM entitled to a holiday with his family? Remember GonziPN went abroad when Malta was in one of the crises afflicted by the GOnziPN admin.

JM from the opposition can't do much other than criticise and uncover the government's everyday blunders and disasters. Yes he called for an election so from the government he can start working to try not to let the ship sink at least.

Jay Grimaldi

Jul 23rd 2012, 13:03

hehe it's a waiting game now...

J Micallef

Jul 23rd 2012, 12:46

And a sad piece of history, at that.

Mario Camilleri

Jul 23rd 2012, 12:17

Spot on Joseph Micallef, this is the real worry and a worthy news value, not that of Joseph Muscat's week's holiday.

Joseph Fenech

Jul 23rd 2012, 12:26

Kieku smajna min Joseph u imitajna l Cipru kif riedna ftit tax xhur ilu ilna hafna li fallejna

Ivan M. Dingli

Jul 23rd 2012, 13:57

Ahseb u ara kiku ghamilna bhal Ireland!!

Jonathan Camilleri

Jul 23rd 2012, 13:41

Well, we're not surprised aren't we?

Political leaders started off national debt because otherwise Malta would have no finance for its projects, and, debt progressively increased, as we apply for more finance from the European Union.

From an economic perspective the private sector need to find out and improve the revenue that this country generating?

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