The EU yesterday closed an excessive deficit procedure started against Malta in 2009, noting that the 2013 Budget, presented last week by Finance Minister Tonio Fenech, had “consolidation measures” aimed at strengthening Malta’s public finances.

The excessive deficit has been corrected

During their monthly meeting in Brussels, EU finance ministers agreed that since 2009, Malta had taken appropriate measures to put its finances in order and declared: “Malta’s excessive deficit has been corrected”.

Action against Malta was started in July 2009, following a 4.7 per cent deficit reported in 2008, significantly above the three per cent EU threshold.

Although originally, Malta was given until the end of 2010 to put its house in order, the island was allowed another year due to a sharper-than-expected deterioration of the island’s economy stemming from the global economic downturn.

Following various measures taken by the Government, the deficit was reduced to 2.7 per cent in 2011 and is expected to decline further to 2.3 per cent by the end of this month.

In its recommendation to the Council, the Commission said it was expecting Malta’s deficit to remain below the three per cent of GDP reference value over the forecast horizon – the end of 2014.

According to the last week’s Budget estimates, the deficit should fall to 1.7 per cent next year.