The European Commission will not demand any Budget cuts but will keep an eye on Malta in line with the excessive budget procedure.
Making the announcement yesterday, Prime Minister Joseph Muscat told the House of Representatives this was a positive message for Malta, adding that Brussels would formally announce its decision today.
The crucial element was not whether or not Malta was placed under an excessive budget procedure but whether or not the European Commission actually imposed spending cuts as had happened under Finance Minister Tonio Fenech, when he was told to cut government spending by €40 million, Dr Muscat said.
The Government had negotiated in a way that would not necessitate the European Commission impose spending cuts. Instead, it would give the Government the opportunity and the time to get things on track.
Dr Muscat said the Commission fully trusted the Government.
The Government team had convinced the Commission that it was able to have the economy growing at a better rate while keeping public financing under control with better revenue and less waste.
Dr Muscat said the Opposition had accused the Government of maliciously planning to have Malta placed under the EDP. However, data provided by the National Statistics Office confirmed that the deficit in 2012 had exceeded the established three per cent mark. The Opposition had also said that this was not enough for Malta to be put under the EDP. In addition, it did not deem this year’s Budget to be convincing when, in fact, it was the same one presented last November by the Nationalist Party now in Opposition.
‘A positive message for Malta’
Therefore, what the Opposition was saying meant that it was its own plan that was not credible, Dr Muscat said to interruptions.
Malta told the Commission that the main difference in the budgeted expenses was the allocation of funds to cover the collective agreements entered into before the general election and other spending not provided for by the Nationalist Administration in its Budget.
What was crucial was that the Government had successfully negotiated on implementing the Budget as approved without any cuts in public expenditure. Dr Muscat said the Government would not take the easy way out and pledged it would respect the commitments.