A European Commission delegation will be visiting Malta in the coming week to analyse the 2011 Budget before it is presented in Parliament.

Malta will be the first EU country to have its budgetary plans scrutinised by Brussels as the Commission embarks on a drive to introduce more control over the fiscal and monetary policies adopted by member states, and in the process avoid a repetition of the Greece economic crisis.

The so-called European semester is a six-month period every year during which the member states’ budgetary and structural policies will be reviewed to detect any inconsistencies and emerging imbalances. The aim is to reinforce coordination while major budgetary decisions are still under preparation.

The 2011 Budget, likely to be presented later his month, will be a cautious one intended to drive the deficit down to below to “at least” 2.9 per cent of the GDP next year, Finance Minister Tonio Fenech told The Sunday Times.

The cut could finally pave the way for the 10 per cent top income tax cut promised by the Nationalist Party in 2008, which Mr Fenech confirmed yesterday would not take place in this month’s Budget.

Asked whether the government would honour its electoral pledge in next year’s Budget, Mr Fenech replied “maybe”.

The Labour Party had said that savings made through the elimination of various subsidies meant the government had no justification for delaying the tax cuts promised before the general election.

But Mr Fenech said that though the economy is expected to grow by some four per cent this year, the government cannot afford to do anything that would cause it to retract or deal a blow to the deficit targets.

“We have a menu of options for this Budget. Our first aim is to contain public expenditure,” said Mr Fenech, adding that the government would be doing its utmost not to touch any of the “big taxes” like Vat.

The government also needs to do its utmost to trim its debts, and avoid the crisis faced by other countries in the Mediterranean region, he said.

Meetings with all the ministers were concluded last week, and the Finance Ministry will now decide which sectors should take priority in the upcoming Budget.

Some issues are still pending, such as discussions with the Malta Hotels and Restaurants Association on the contentious bed tax.