An excessive deficit procedure against Malta has been announced by the European Economic and Monetary Affairs Commissioner Joaquín Almunia this morning.
Addressing a news conference on the Spring Economic Forecast, Mr Almunia noted that Malta last year had surpassed the deficit reference rate of three percent of the Gross Domestic Product. Malta's deficit stood at 4.7 percent.
Under the provisions of the Stability and Growth Pact, member states agree to respect a deficit-to-GDP ratio of three percent and a debt-to-GDP ratio of 60 percent
If a member state exceeds the deficit ceiling, the excessive deficit procedure is triggered. This entails a number of steps, including the possibility of sanctions, to encourage the member state concerned to take measures to rectify the situation.
According to the Union's economic forecasts Malta's deficit was to be 3.6 percent this year and 3.2 percent next year