Prime Minister Lawrence Gonzi told an EU summit this evening that the EU needs to move from austerity to growth.

Citing various economic successes registered by Malta in the past months despite the negative international climate, Dr Gonzi said that there had to be a balance between fiscal discipline and economic growth.

"The Maltese government believes that the EU must avoid getting trapped into a vicious circle of austerity, contracting economies, falling tax revenue, rising deficit and debt ratios and more austerity. The EU's way forward should be built on a balance of general macro-economic stability, structural reforms in order to ensure sustainability, unburden enterprise, reward work, free markets and to generally improve productivity and competitiveness levels."

Dr Gonzi gave EU leaders an overview of Malta's economic achievements in the past year.

He said that in a year dominated by the financial crisis, Malta made a clear choice in favour of macro-economic stability. This gave positive results.

While by December 2011, Malta's annual inflation was the lowest in the euro area, the island registered a growth of 2.2 per cent of GDP, well above the 1.8 per cent euro average, while employment growth stood at 1.7 per cent, much higher than the 0.3 pet cent registered in the euro area.

Until November 2011, Malta also had the fifth lowest unemployment rate in the EU, at just 6.4 per cent and the forth lowest among youths, at 14.3 per cent.

Dr Gonzi said that during 2011, Malta also managed to bring down the deficit to under 3 per cent of GDP, from 4.6 per cent in 2008 and is now aspiring to move Malta out of the Excessive Deficit Procedure (EDP) in the near future.