Malta's financial situation has gone back to what it was four years ago, and debt projections are off by €100 million, the opposition spokesman on finance, Charles Mangion, said in a statement this afternoon.

He said that according to official figures, the deficit in the first eight months of this year had reached €260 million, equivalent to the Lm112 million deficit of 2004 when Dr Gonzi took over the reins of the finance ministry.

The national debt in the first eight months of this year had risen by more than €231 million when the government had projected it to be €110 million, a shortfall of €100 million. Debt servicing costs were this year projected to increase by less than €3 million but by August the increase was already in excess of €7 million.

Dr Mangion said the government could not claim that these figures were the result of the international situation when, as the same time, it was boasting that GDP had grown by 3% in the first half of the year and revenue from taxation had gone up by €74 million.

Furthermore, while the government was saying it had increased its subsidy to Enemalta to counter higher oil prices, Minister Austin Gatt had said that the government had saved €55 million from hedging.

Nor could the government blame the increased outlay on children's allowances, since this was already included in the budget estimates.

Clearly, the government had neither control nor a firm hand on national finances, Dr Mangion said.