Government to publish its plans to reduce deficit below 3% target

The government's plans to reduce the deficit below 3% of GDP will be published online on Monday, finance minister Edward Scicluna said today.

During a meeting the Prime Minister Joseph Muscat had with the Malta Employers Association, Scicluna said that the government would be publishing online a document outlining its plans to reduce the deficit by the end of the year.

These plans have already been presented to the European Commission which In May placed Malta under an excessive deficit procedure. In 2012 Malta recorded a general government deficit of 3.3% of GDP, breaching eurozone rules to keep deficits below the 3% threshold.

Prime Minister Joseph Muscat noted that "this is a step in the right direction and will send the right message to foreign investors."

The Commission wants Malta to put an end to its excessive deficit by 2014, but it believes the deficit will rise to 3.4% in 2013 and 2.7% in 2014 - an improvement of 0.7%. Additionally, it will have to ensure that government debt approaches 60% of the country's GDP.

Malta was asked by the Commission to specify and rigorously implement the measures that are necessary to achieve the correction of the excessive deficit by 2014, and use all windfall gains for deficit reduction.

Pointing out that reducing the deficit below 3% would restore trust in the economy, Muscat underlined the importance of transparency and said that the publication of the documents is in line with Malta's commitment to make its plans known by October.

"We are confident that we will reach our targets and reducing the deficit is a priority," Muscat added.