Malta will reach its deficit reduction targets by the end of the year despite the European Commission’s fears, Prime Minister Lawrence Gonzi promised yesterday on the eve of the Budget.
This is the most important Budget of the past seven
He said the government knew the situation “a little better” than the Commission, which based its calculations on the information provided by the government for the first nine months of the year.
The Commission issued an early warning last week to Malta, as well as Cyprus, Belgium, Hungary and Poland, seeking “convincing evidence” of how it would rein in its structural deficit.
“We know what happened in October and what is happening in November and I am confident that, by the end of this year, we will be one of a very small group of countries to reduce our deficit to less than three per cent,” Dr Gonzi told a Radio 101 interviewer.
More specifically, he added, Malta’s deficit would be reduced to between 2.8 and 2.9 per cent of the economy and would be further reduced next year to 2.5 per cent, to show this was not a one-off reduction.
Today, Finance Minister Tonio Fenech will read his Budget speech, in which the government will explain how it plans to achieve these goals.
Dr Gonzi said this was perhaps the most important Budget of the past seven he has worked on because the global economic situation was at its worst state in the past 100 years.
His priority was to keep Malta’s finances sound, even if this meant having to take unpopular decisions and suffering political consequences. It was not the right time to take risks but to consolidate what was already reaping results.
Your guide to the measures
The Times will tomorrow carry a supplement on the Budget measures announced by the Finance Minister this evening. The publication will contain a breakdown of the major initiatives together with an analysis and first reactions. The latest economic indicators and targets set by the government will also be highlighted