When the Nationalist government is justifiably getting so much flak for a string of serious administrative shortcomings, it is of some comfort that, on the economic front, at least, the country is recovering from the recession. However, although the latest provisional figures confirm this, it would be foolish for the government to immediately start patting itself on the back and ignore the impact the debt problem in a number of European Union member countries could have on the island's economic recovery.

The drop in the value of the euro may now give a good helping hand to exporting firms but, unless Europe grapples with the sovereign debt crisis in a convincing manner, the situation could bring about new difficulties. The World Bank has already raised fears of a second recession affecting most of the industrialised world if governments do not deal successfully with the debt crisis. Indeed, it fears it could well push advanced economies into a second recession next year.

In Malta's case, the extent of the rejoicing over the improvement in the GDP ought to be tempered by a prudent approach to the situation and by the taking of further measures aimed at making the island even more competitive. At a time of so much doom in the eurozone countries, where stiff austerity measures are being taken in one country after another, the GDP rise ought to generate greater optimism in the island's ability to get over difficulties. But it should not make the government, or the trade unions, for that matter, think that all of the island's worries are over. They are not.

To be fair, the government is not acting this way, as shown by the reaction of the Finance Minister to the latest GDP figures, and, also, by the timely aid given to firms that were directly hit by a shrinking order book in the wake of the recession. That intervention has paid off in more ways than one in that, besides helping to keep the firms open, in some cases it even led to either expansion or the taking up of more workers. On the other hand, it is not quite understood why it is taking the government such a long time to launch the micro credit scheme announced in the Budget for this year. As the Malta Chamber for Small and Medium Enterprises - GRTU pointed out so well, the government can very well use its own funds until it settles any outstanding matters it had with the European Investment Bank.

Besides all this and the impact the new financial trouble may have on the recovery in Europe, and, consequently, on Malta's economic well-being, there is still the matter of the deficit that has to be addressed. Although Malta's deficit is nowhere near that of some other EU members, it is still above the level required by EU rules. According to the government's forecasts, the deficit for this year should be of 3.9 per cent but the European Commission does not think Malta will make it. In fact, it is estimating that it will be 4.3 per cent.

Only last March, the Commission warned Malta it was not satisfied with the island's plans to achieve a positive budgetary balance and called for more robust financial planning. So, while the GDP growth for the first quarter is a good sign, the situation generally is as yet far too uncertain for any celebration.