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Wednesday, November 7, 2012, 15:10

EU to lift Excessive Deficit Procedure for Malta

The European Commission has recommended a lifting the Excessive Deficit Prodecure for Malta in view of the country's consistent path towards a smaller deficit, Finance Minister Tonio Fenech said this afternoon.

He said the decision was taken in view of the fact that Malta's deficit had slipped below 3% of GDP last year and remained below that threshold.

Speaking at a press conference, Mr Fenech also welcomed an assessment of Malta's economy made by the Commission in its autumn country report.

"Economic growth rebounded in the second quarter of 2012 and soft indicators suggest it is still picking up in the second half of the year. For 2012 as a whole, real GDP is forecast to expand by 1%, driven entirely by net exports, which benefit from improved external competitiveness and a remarkably resilient tourist sector. These developments are projected to result in a marked improvement in the current-account balance, which is forecast to reach a surplus of around 2% of GDP, after having recorded a deficit for over a decade. On the downside, domestic demand, including inventories, appears to be rather weak and is forecast to be a drag on growth in 2012," the Commission said.

A gradual recovery in domestic demand is projected to underpin the expansion in economic activity in 2013-14. Investment is projected to continue recovering slowly on the back of EU-funded projects, given the approaching end of the 2007-13 programming period, as well as the construction of the electricity interconnector with Sicily.

Household consumption is projected to slowly recover in 2013-14, mostly on the back of a resilient labour market and higher disposable income. Employment is expected to increase over the forecast horizon, albeit at somewhat more subdued rates compared to 2010-11. Average wages are also set to continue growing, partly boosted by the mandatory wage indexation, particularly in 2013, and partly reflecting a composition effect, as new jobs are likely to be created in high-skilled occupations.

The Commission warned that inflation is projected to average 2.9% this year, slightly higher than last year, before moderating to 2.2% in 2013-14.

After improving by 1 pp. of GDP in 2011, the structural deficit is set to stabilise in 2012 and, on a no-policy-change basis, to improve by ¼ pp. of GDP in 2013 and by ½ pp. of GDP in 2014. The main downside risk to this scenario is related to the possible need for additional subsidies to Enemalta.

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Salvino Zammit

Nov 8th 2012, 10:16

Naqbel mieghek 100 fil 100, wiehed jista jghadi min hdejn l-Ajurport tal-Gudja, jiena nibdilek mil Gimgha wara nofsinhar- gewwa dan il-lokal fejn l-familji bit tfal jkunu jighabu, u jeiklu jkun imbalatt bin-nies jistennew wara l-counter biex jkun imishom-barra jittiehdu l-ordinijiet fil karozzi, u hemm wiehed jkun jista jara u jmiss b'idejh is-sitwazzjoni li fiha qieghed nghixu fil prezent-

Mario Scicluna

Nov 8th 2012, 10:23

Il vizzju tal-materjalizmu mhux facli teqirdu Vassallo, mur ara issa x'qed jiehdu l-Griegi bil Porche Cayannes u Audi 4's li xtraw u ddandnu u ddejnu!! Nitolbok tara wkoll bliet shah ta appartamenti vojta fi Spanja wara dan il-kollass! Toqghodx timpressjona ruhek bli tara nies jiffongaw f'ristoranti, 'living beyond their means' kien il kagun tal-krizi finanzjarja li faqqat fit 2012

mark borg

Nov 8th 2012, 07:51

dan x argument bazwi hu li ghax id dejn mal banek u il poplu tghana qishu mhux dejn ? mhux xorta hafna minnhom kienu biex jigu spalpaljati il flus li issa qed inhallsu imghaxxijiet gholjin ghalijhom ,anke bonds bis 7 fil mijja ? allura bl istess argument immur nidejjen xi nofs mijlun ghalija personali biex nispalpaljahom u ghax mal banek maltin,kollox sewwa ....jigifieri kollox gustificat hux

Gordon Farrugia

Nov 7th 2012, 21:09

why Joseph do you intent to pay the EUR5,000,000,000 yourself!!!?

and that's excluding say another EUR750,000,000 on the debt guaranteed by the government on parastatal entities and the loans we have given to greece lol !!!!

we are speaking billions here!!!!!!

David Magro

Nov 8th 2012, 06:12

Sur Fenech,

Qed tghix Malta jew le? Hawn ricessjoni u qed nghixuha...GonziPN ghandu habta jispinja rulling kif jaqbel lilu..anke rating tal-Moody`s fuq Malta...qal li mhux tajba....noqghodu attenti ghax gej il-Budget u GonziPN ghandu bzonn ixxerred ic-cejca....halli li wara l-EU tnaqqaslu l-ammont...possibli li ghadek ma drajtx lil GonziPN.

Joe Grech

Nov 7th 2012, 20:41

You must be a REAL FOOL if you take all that's declared by the E.U. as the absolute truth. Very often it's just trash. Also the E.U. can be fooled by erratic data and statistics presented to it. If this is not the case then how do you explain that so many E.U. countries have been ruined financially and economically - Greece has just declared that it again has pressing economic problems....

Joseph Aquilina

Nov 7th 2012, 21:02

Are you seriously asking that question? When was Joseph Muscat ever right about something?? (VAT, Joining the EU, Student Stipends, Advice to Iceland, Advice to Malta about being more like Cyprus, etc. etc. etc.).

Francis Saliba M.D.

Nov 8th 2012, 08:08

@JoeGrech.

The EU is to be believed only when its figures could help out the Labour Party prophets of doom amd gloom. At all other times they are easily fooled and should not be believed. Is that your argument, Joe?

Mary Ann Borg

Nov 7th 2012, 23:23

Mhux Joseph, la jrahhas il-kontijiet tad-dawl u l-ilma? Mela m'ghandekx fiducja siehbi?

Gordon Farrugia

Nov 7th 2012, 21:12

assuming there are 200,000 of us able to work and pay taxes we each have to pay EUR25,000 to our big uncle to get ourselves free of debt!!!!! ;P

B. Borg

Nov 7th 2012, 19:44

Dejjem ahjar minn Gonzi u l-Klikka, ha forsi jigi xi investiment barrani sura bhal SGS, jew il-Playmobile mela dak l-investiment kbir mill-Brazil, li habbar il-PM dan l-ahhar

R. Balzan

Nov 7th 2012, 17:45

At the EU they don't seem to give that much importance to our creative accounting - naturally because they're expert at it themselves. Good for us.

Victor Calleja

Nov 7th 2012, 18:13

It seems that the EU prefers a Nationalist government not a Labour one. they bare tailoring their reports to suit the government for the next general election.
Tajd xtajt l'EU meta tistaqsi lil maltin xqieghed jibqalhom fil but ma nahsibx li jirrifletti xqieghda tghid EU.

Carmel Zammit

Nov 7th 2012, 18:47

Oh yes. Gonzi did present a budget and it was shot down by the EU last year. Watch before you leap. The EU is only halting 'Excessive deficit procedures' for the past year. Greece like Malta too had no problem utill it became known to all that it was not in a position to service the mountain of debt accumulated. Balancing the budget and hiding teh debt serves no purpose.

Francis Saliba M.D.

Nov 7th 2012, 21:32

@CarmelZammit
Do not quote the EU only when and where it suits you. If the EU recommended alterations to the budget it subsequently expressed satisfaction that the deficit was successfully reduced below the 3% where it is anticipated that it will remain next year.

joseph borg st john

Nov 7th 2012, 22:17

Carmel Zammit don't worry if God forbids labour is elected it won't be long before we will be asking the EU for a bailout you were wishing for with all the promises Joseph been telling us i'm sure he won t disappoint you .

Nazzareno Cortis

Nov 7th 2012, 20:33

@ J.Aquilina---------Facts are-------No matter what EU says-------- 5,000,000,000 (five thousand million ewro) debt all created by the famous PN governments!!!!!You seem ro be very happy----the PN is very happy creating yearly deficits (which after all adds to the five thousand milloin ewros)---and the EU seems to be also happy with this mountain of maltese debt!!!!

Joe Grech

Nov 7th 2012, 20:45

You are very right to question what's going on. I personally look upon the E.U. as one big inefficient block with Commissioners, Auditors, MEPs just intent on one thing - their salary.
There's no political union in the EU - how can this block make economic headway - as China, a number of South American countries, etc are doing?

Joseph Aquilina

Nov 7th 2012, 17:24

Another proud member of Joseph's army of gloom and doom?

Jurgen Farrugia

Nov 7th 2012, 17:06

Do you know what accrual system is or are you just repeating after Charles Mangion?

m. borg (slm)

Nov 7th 2012, 17:15

Mr Cutajar gonzi might not have made a "Cyprus" or an "Iceland" of Malta but he surely made an S of himself when he made an "Ireland" and a "Spain".

We are weighing what JM is offering and we know he is offering a way out of the old political Status Quo of friends of frienda and Oligarchies.

Mr Anthony Briffa

Nov 7th 2012, 19:52

@ m. borg
May I please ask you what are these offerings by JM that you are weighin? He personally stated last Friday that he will make his intentions known after the PN publishes its programme. Perhaps, are you weighing what Mrs. Dalli said about the audit of the civil services, or perhaps the statements by Prof. Scicluna that the stipends and free health care are not sustainable? Please advise?

J.C. Borg

Nov 7th 2012, 16:13

Ma narax li ghandna ghax ninkwetaw fuq dil-haga ghax, jekk wara l-elezzjoni jkun hemm Joseph PM, ghandu soluzzjoni ghal kollox.

joseph green

Nov 7th 2012, 16:43

Naqbel mieghek 100% JC Borg

H. Psaila

Nov 7th 2012, 17:08

@ J.C Borg - Veru ta, ghandek ragun ghaliex ja jitla JM kollox fuq ir-rubini sejjer jahdem u kollox sejjer jkun irhis u dan minghajr ebda zieda fit-taxxi.

C Cassar

Nov 8th 2012, 06:52

What do you expect, to always take, take from the EU? Malta has benefitted hugely from EU membership and living standards have soared since 2004. It's quite right and part of improving itself that Malta at some point needs to contribute in order that other less well off nations can benefit in the same way as Malta.

Antonella Briffa

Nov 7th 2012, 17:29

iva infatti kont qed nistenna lil Joseph taghna jiccelebra bic-cekcieka!
Tal Lejbor lanqas biss ghandhom proposti.. ahseb u ara kemm ser jirnexxielu jikseb rizultati pozittivi! Anzi biex inkunu fair, hargu bi 12 il-linja gwida. Gwidi li bl-ghajnuna ta ftit sens komun kulhadd kien jasal ghalihom, pero irnexxielu jghaddi ta Salvatur (wara Mintoff)

Missna smajna minnek Joseph!

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