Malta is at risk of attracting extra attention to its public finances from the EU and international financial institutions over a shortfall of just €22 million on a €6.7 billion budget, according to former Finance Minister Tonio Fenech.
Under the Budget estimates presented in November by the previous Nationalist Administration, Malta was to end 2012 with a deficit of 2.3 per cent of GDP.
In last Monday’s Budget presentation, the figure was revised upwards to 3.3 per cent.
Under EU rules, a country must not allow its deficit to surpass the three per cent limit.
It would otherwise be at risk of what is known as an Excessive Deficit Procedure (EDP) being instituted by the EU.
In 2012, Malta’s GDP was €6,755 million, according to the Government’s new figures. This means it will surpass the EU’s deficit limit by just €22 million (0.3 per cent).
In his first Budget speech, Finance Minister Edward Scicluna said the difference in the projected deficit for 2012 resulted mainly from a shortfall in the Government’s revenue from various taxes.
“These included €66 million due in excise owed to the Government by Enemalta,” he said.
Prime Minister Joseph Muscat later clarified the €66 million was actually included in the Government’s revision of the deficit and was not still owed to the Government, as originally stated in the official Budget speech.
However, the Nationalist Opposition claims the Government should have paid more attention to its budget preparations to avoid the possibility of facing an EDP.
“Even if we take the Government’s word on Enemalta’s dues, something which we claim is not clear at all, more attention should have been given to the way the Government accounts were revised, in order to try to avoid surpassing the three per cent limit,” Mr Fenech argued yesterday.
Apart from the actual revenue and expenditure figures, the Government’s accounts normally also take into consideration pending payments and income through a system known as “accruals”. These normally amount to many millions.
“It is normal practice that technical people overestimate some items. A much better and more detailed analysis should have been made by the Finance Minister, particularly when we were at risk of surpassing the EU threshold by just a few millions.
“It seems that the Government took this lightly and is now risking that the country face an EDP. All this could have been avoided,” he argued.
Asked for a reaction to Mr Fenech’s claims, Minister Scicluna failed to reply.
At the same time, the Finance Ministry yesterday again insisted in a statement that the €66 million that Enemalta owed the Government in 2012 had been taken into consideration in the revision of the deficit: the 3.3 per cent figure included the revenue from the State energy cooperation.