Updated | Excessive deficit procedure for Malta imminent

It was only a "matter of semantics" as to when the European Commission will be taking action against Malta as deficit reached 3.3% of the GDP.

Addressing the Maltese press in Brussels, Prime Minister Joseph Muscat admitted it was likely that the European Commission will be issuing the EDP against Malta for having failed to keep its deficit under 3% as required by the Maastricht criteria.

He said that once a country exceeds the 3% deficit, a country automatically falls into EDP.

Muscat was however confident that government's plan would succeed in bringing back the country's deficit to below the 3%, adding that the Commission was looking at this plan positively.

Muscat's comments confirmed Tonio Fenech's suspicions who yesterday told the parliamentary committee for economic and financial affairs that it was likely that Malta would fall back into EDP. Finance Minister Edward Scicluna said the government was doing all it could to convince the European Commission otherwise.

"The European Commission is not believing us when we say that we are going to consolidate our fiscal slippage. Last year, the government had given its word it would cut €40 million from its budget. But it didn't keep its word. And now, we are in a weak situation with the European Commission. Whatever we're promising is not being believed," Scicluna replied.

During the press conference, Muscat also accused a former Cabinet member of the previous administration of having "instigated" representatives of the International Monetary Fund against Malta during meetings held with members of the Opposition this month.

Muscat accused an unnamed former minister of "inciting" the representatives against the government's economic and financial policies.

"An ex-minister of the former government incited these individuals against Malta's economy as they prepared to make a report on the country's financial and economic situation," Muscat told journalists.

He added that this person had said "things" about the Maltese economy that up until "a few months ago, he would have never admitted them".

According to the Prime Minister, the former minister spoke about "non-credible economic figures and energy plan".

The IMF is mandated to oversee the international monetary system and monitor the economic and financial policies of its 188 member countries, including Malta. As part of the surveillance process, which takes place both at the global level and in individual countries, the IMF highlights possible risks to stability and advises on needed policy adjustments.

It carries out surveys of the state of a country's economy and makes recommendations towards achieving a sustainable fiscal position and debt management structure.

In Malta, the IMF carries out annual rounds of consultations with the two major political parties, members of the government and the Central Bank amongst others.