European Commission will not impose budget cuts on Malta

The European Commission will not impose budget cuts on Malta, the Prime Minister Joseph Muscat said tonight in Parliament.

"I can announce that in its decsion tomorrow, the European Commission will not impose any cuts on Malta, unlike it did during the previous legislature," Muscat said.

Tomorrow the European Commission will announce its decision to place Malta under an Excessive Deficit Procedure, however Muscat explained that the Maltese government will not be asked to make any cuts to its budget.

"The major decision is not on Malta entry in the Excessive Deficit Procedure but on not imposing spending cuts on Malta," Muscat said.

He pointed out that this decision contrasted with European Commission's decision to impose cuts on the previous government's 2012 budget, when previous finance minister Tonio Fenech was "locked in a room and told to make a €40 million spending cut."

In January 2012, Fenech had announced that the government will cut €40 million from the 2012 budget in order to ensure that the deficit remained below 3% of GDP, however the former finance minister always denied that the cuts were imposed on Malta. Instead he argued that the cuts were a precautionary measur.  

Muscat added that subject to ratification tomorrow, the government will be given the opportunity and time to get "things back on track."

Describing this as a success, Muscat said: "This is an achievement because this government has shown that it is well prepared to foster economic growth and keep finances under control,."

Taking a swipe at the Opposition, Muscat said that the PN was shooting itself in the foot by shedding doubt on the government's projections because his administration had presented the same budget presented by the previous PN government.

"If you are shedding doubt on the budget that you are saying that your own budget was not credible," Muscat told the Opposition.

On hearing Opposition MPs comment that the Labour government had altered the budget presented by the PN government last year, Muscat retorted "The only changes were those imposed by the Collective Agreements signed by the previous government on the eve of the general election. However, we are a responsible government and instead of taking the easy way out and canceling those commitments, we will honour them."

Before Muscat started his address, PN whip David Agius asked the Prime Minister wheather he would be retracting his comments which were censured by the Speaker of the House in Monday's sitting, however the Muscat wryly replied that he would stand by the Speaker's ruling.