EU ‘Satisfied’ With Malta’s Economic Progress

by Jason Gorringe, Tax-News.com, London

15 July 2005

European Monetary Affairs Commissioner, Joachim Almunia has stated that Malta's economic performance is "satisfactory", although he urged the government to continue with efforts to reduce the country's structural deficit.

In an interview with the Times of Malta, Almunia, who is visiting Malta this week to discuss the state of Malta's economy since accession to the European Union in May 2004, noted that "bigger efforts" are being made by the government to boost the Maltese economy as compared to last year.

"Our forecasts for 2006 are showing further increases in growth and one has to keep in mind that this is happening while the government is making a big effort to cut the deficit and to consolidate the public finances," Almunia observed. However, he went on to add that: "My main concern in the case of the Maltese economy is linked to the level of public debt which is far above the limit of 60 per cent of GDP we recommend. I think the authorities in Malta should pay attention to this."

Nonetheless, he praised the efforts of the Maltese authorities in reducing the public deficit.

"The government has definitely made a very strong effort over the past years and achieved very good results in reducing the public deficit. This is now being steadily reduced in order to reach the target of under three per cent. These efforts should continue," he commented.

Almunia also brushed off suggestions that the new EU member states are being forced into the Exchange Rate Mechanism, the first stage on the path towards full adoption of the euro.

"We did not put any pressure on the Maltese authorities to join ERM. It is true that for the new member states there is no opt-out, however it is up to the member states when to join," he told the paper.

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