The government this afternoon reacted to the European Commission's decision to place Malta under an Excessive Deficit Procedure by reiterating its commitment to get the deficit down below 3% by the end of this year.

The government said it welcomed the Commission's decision to not impose additional measures on the country's budget.

"This shows that the European Commission is confident in the new Government's plan, which is a positive sign for the future of the Maltese economy."

It said it is committed to ending 2013 with a deficit below the 3% threshold despite the Commission's decision to allow Malta the freedom to do so by the end of 2014.

"The Government is committed to meeting these targets, while also carefully addressing inefficiencies and introducing incentives aimed at boosting the country's revenue."

It was also noted that in its country specific recommendations, the Commission had removed any reference to changes to the cost of living adjustment mechanism.

"This is thanks to the strong defence mounted by the Maltese Government in this regard," the government said.

PL STATEMENT

In a statement, the Labour Party said the European Commission had given a clear sign of confidence in the new government by not imposing additional measures and new taxes.

This clearly showed that the European Commission believed in the government's plan and in the responsible financial administration of the new government.

The report was another ugly blemish on the Nationalist administration which was still administered by the same people who put the country in this situation.

PN STATEMENT

In another statement, the Nationalist Party said that contrary to the impression the Prime Minister and the Finance Minister had tried to give, the European Commission did not accept the government's explanations and requested it to take corrective action by October.

This was necessary because the European Commission had concluded that the Labour government would not reduce the deficit to under three per cent this year but increase it to 3.7 per cent.

The PN again criticised the government's decision to expand cabinet in an exaggerated manner and employed an excessive number of people from outside the civil service to serve people who were close to it.

This decision on its own would increase would increase the annual expenditure by €6 million a year, the PN said.