| Author (Corporate) | European Commission |
|---|---|
| Series Title | COM |
| Series Details | (2013) 390 final (29.5.13) |
| Publication Date | 29/05/2013 |
| Content Type | Policy-making |
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According to Article 126 of the Treaty on the Functioning of the European Union (TFEU) Member States shall avoid excessive government deficits. According to Article 126(5) TFEU, if the Commission considers that an excessive deficit in a Member State exists or may occur, it shall address an opinion to the Member State concerned and the Council accordingly. Having taken into account its report in accordance with Article 126(3) TFEU and having regard to the opinion of the Economic and Financial Committee in accordance with Article 126(4) TFEU, the Commission concluded that an excessive deficit exists in Malta. The Commission therefore addressed such an opinion to Malta and informed the Council on 29 May 2013. According to data notified by the Maltese authorities in April 2013, the general government deficit in Malta reached 3.3% of GDP in 2012, thus exceeding the 3%-of-GDP reference value. The Commission report under Article 126(3) TFEU considers that the deficit was close to the 3%-of-GDP reference value, but the excess over the reference value could not be qualified as exceptional within the meaning of the Treaty and the Stability and Growth Pact. In particular, it does not result from a severe economic downturn in the sense of the Treaty and the Stability and Growth Pact. In 2010 and 2011, real GDP growth was, on average, above 2% annually, higher than potential growth. Preliminary GDP data published by the national statistics office on 11 March 2013 show that economic growth slowed down in 2012, but remained positive at 0.8%. The positive output gap in 2011 is estimated to have turned slightly negative in 2012. The planned excess over the reference value cannot be considered temporary. According to the Commission 2013 spring forecast, the deficit would increase to 3.7% of GDP in 2013 and reach 3.6% of GDP in 2014. The deficit criterion in the Treaty is not fulfilled. Notified data also show that the general government gross debt stood at 72.1% of GDP in 2012, above the 60%-of-GDP reference value. The Commission 2013 spring forecast projects the debt ratio to increase to 74.9% of GDP in 2014. Following the abrogation of the EDP in December 2012, Malta benefitted from a three-year transition period to comply with the debt reduction benchmark, starting in 2012. In 2012, Malta did not make sufficient progress towards compliance with the debt reduction benchmark, as its structural deficit worsened whereas it was required to improve it. It can therefore be concluded that the debt criterion of the Treaty is not fulfilled. |
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| Source Link | Link to Main Source http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2013:390:FIN |
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| Countries / Regions | Malta |
