Updated: Most of this year's stocks already issued - finance ministry
Debt for the first quarter of the year had increased to 75 per cent for two reasons - the guarantees given under the European Financial Stability Fund for a number of countries to be bailed out and the fact that the government issued most of this year's stocks in the first quarter.
This was done because of favourable market conditions.
In a statement issued this evening, the Finance Ministry said this meant that the country would be saving on interest and it would be borrowing less during the rest of the year.
In the first half of the year, €455 million worth of stocks were issued, or 65 per cent of this year’s total, which could not exceed €700 million.
As a result, it was clear that the 75 per cent debt rate was temporary but the Opposition spokesman was choosing to ignore this.
The Finance Ministry was referring to a statement issued earlier today by Opposition spokesman Karmenu Vella.
Mr Vella said that the Finance Minister revised his public debt target upwards three times in the past eight months.
He said that in April last year, the minister of Finance had indicated that public debt at the end of this year would stand at 66.9% of GDP.
But in the budget the target went up 68.9%. In the Stability Programme of April this year, this was again revised to 70.3% and in a statement to The Times this week, the minister said that his public debt target for the end of this year was revised to 72%.
Mr Vella also said it was likely that the new target would not be achieved and according to European Commission's debt projections published last week, Malta’s debt was set to rise to 74.8% of GDP by the end of this year.
In its statement, the ministry noted that although the government remained focus to strengthen the country’s financial position, this was stronger than the euro zone average where debt surpassed 88 per cent.
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B. Storace
Jul 27th 2012, 09:42
I do not believe that our exports will ever exceed the imports thus automatically leaving a negative balance behind. But I do believe that some imports can be stopped completely because we produce a similar or better product. I also believe that other certain imports can be quota regulated. This practice is followed in other countries successfully and it would be a means to slowing down the ever widening negative gap.
John Azzopoardi
Jul 27th 2012, 00:46
Borrowing will always be there in order to pay for the debt that has already been created. The only way debt will start growing is by raising taxes. And I am sure the PL will do this once elected. Maybe even a tax on homes.
Joseph Grech Attard
Jul 26th 2012, 20:21
If we stop borrowing now, the minister is right. If not, he is not. Projections are not facts. Lately the projections have failed miserably. In a few years we have moved from 'money is no problem' to 'money is the biggest problem.' Those are the types of projections we have been made to believe.
Alfred Farrugia
Jul 26th 2012, 19:58
What may also be significant is that since 1998, the “Central government debt” has practically doubled as it increased from 2.160,4 millions of ECU to 4.245,4 millions of euro by 2010!
http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=gov_dd_cgd&lang=en
And all this happened when “Over the eight years from 2002 to 2010, real unit labour costs declined noticeably in Germany and Spain (as well as in Luxemburg, Malta and Cyprus)”, according to the 2011 Euro Plus Monitor, page 31.
http://www.lisboncouncil.net/publication/publication/68-the-2011-euro-plus-monitor.html
Incidentally, the government debt as a percentage of GDP in the first quarter of this year, 2012, reached 75%, that is marginally higher than that of Cyprus – as the Ministry has confirmed on more than one occasion.
But what might be even more worrying, in spite of the clarifications of the Ministry, is that Malta is the 5th country with the highest increase between the last quarter of 2011 and the first quarter of 2012, after Lithuania, Portugal, Spain and Belgium.
http://europa.eu/rapid/pressReleasesAction.do?reference=STAT/12/111&format=HTML&aged=0&language=EN&guiLanguage=en
What will happen if and when the EU decides, by a qualified majority, to start taking action if the Maastricht benchmark of a national debt lower than 60% of GDP is not met by Malta, following the Stability and Growth Pact?
According to the 2011 Euro Plus Monitor mentioned above, which has positive and negative comments for Malta, “Establishing itself as a financial centre can make a small, open economy rich. But it can also be the road to disaster”! (page 49). What are the authorities doing to ensure that the latter will not happen?
Joseph Apap
Jul 26th 2012, 19:48
Mr Debono,
Which figure from the two you gave us the public below is the correct one?
The 23% or the 37% ?
V. DeBono
Jul 26th 2012, 17:05
@M.G.Vella- I'll make it easier for you to understand who got us in this position. It should be sufficient to know that in 1996 under your party the public debt was 37% of GDP. I hope you can now do the Maths
Mr Alexander Azzopardi
Jul 26th 2012, 20:31
Ma nafx ehh ima fil maths miniex hazin biss fil post qiad taghti figura u f post ohra qiad taghti figura ohra, nahseb ahjar tara xin hu minhu lewwel, mili thawad bhal partit tijak
joseph saliba
Jul 26th 2012, 15:48
Since last April the financial-economic situation has been changing continuously. The minister holds the steering wheel - he does not create the waves.
M. G. Vella
Jul 26th 2012, 15:27
I wonder at what figure stood the public debt in terms %GDP, in 1987
V. DeBono
Jul 26th 2012, 16:46
Let me tell you instead what it was in 1996 (under the same government) and then you can do the maths of who got us where we are : 23%
victor caruana
Jul 26th 2012, 15:23
BID-DEJN KOLLOX POSSIBBLI.
IL-PROBLEMA HI BIEX THALLAS ID-DEJN....MA JIBQAX DAQSHEKK POSSIBBLI.
D Vella
Jul 26th 2012, 15:18
Of course the hon. Karmenu Vella would find no fault with having a labour government revising the public debt target every week or so given the financial circumstances both within and beyond our shores!
James Dimech
Jul 26th 2012, 14:44
Maybe Karmenu Vella could propose a few budget best practices from the time he was Minister i.e. when Malta was a third-world country.
A. Schembri
Jul 26th 2012, 14:35
ibqaw sejrin ekk (Y)
Please choose the reason of your report below: