Government welcomes Brussels’s change in tack on COLA mechanism

The Maltese government has welcomed Brussels' recommendations on its excessive deficit procedure, saying the EC will not impose additional measures on the country's budget.

The government said it had mounted a strong defence of the Cost Of Living Adjustment mechanism, which the European Commission had insisted on for several years to be tagged to productivity gains and not inflation.

The reference has now been removed from the Country Specific Recommendations.

"The European Commission is confident in the new government's plan, which is a positive sign for the future of the Maltese economy," the government said in a statement.

The government said it is committed to ending 2013 with a deficit below the 3% threshold despite the Commission's belief that Malta will have a higher 3.7% deficit by the end of the year.

"The government is committed to meeting these targets, while also carefully addressing inefficiencies and introducing incentives aimed at boosting the country's revenue.  From the moment it stepped into office, the new Government began working towards economic growth and responsible fiscal management, and remains firmly committed to doing so."