Prime Minister Robert Abela has increased Malta’s debt by a staggering €2,735,000,000 in two years, or €3.7 million a day.
According to the latest numbers published by the National Statistics Office (NSO), Malta’s debt was €5.3 billion and was on a small but consistent decline when Abela took over as prime minister in January 2020.
By January 2021, the national debt had ballooned to a record €8.1 billion. This means that during his first 24 months as prime minister, Abela’s government increased the debt by €114 million every month.
The increase in debt was the result of two years of successive deficits, with Malta spending €1.4 billion more than it raised in 2020 and 2021, surpassing the EU’s red line of 60% of GDP.
Although the national debt grew more slowly during January 2021, when the economy started showing its first signs of a post-pandemic recovery, Abela’s government still spent €66.2 million more than it could afford, pushing Malta further into the red.
With the country now in election mode, the prospects of reining in this two year spending spree are slim, and debt and deficit projections made for this year are in danger of being derailed by vote-catching electoral promises.
The most blatant example was Abela spending another €70 million in government funds to send €100 cheques to individuals during the campaign in an effort to gain a bigger electoral majority than that of his predecessor Joseph Muscat.
Economists consulted by The Shift said that while part of the massive debt accumulated by Abela’s government was a direct consequence of the coronavirus pandemic, the government and individual ministers took advantage of the extraordinary situation to justify large expenditures.
This led to a significant increase in unnecessary jobs within the public sector, multi-million euro direct orders and tenders to Labour Party insiders, sponsorships and donations presented as pandemic relief but intended to lure votes, and a spending spree on festivals like the recent Film Awards — all with no public accountability.
These short-sighted initiatives have drastically increased the country’s recurrent wage expenditures paid through taxpayers’ funds.
For the first time ever, personal emoluments to government employees reached €1 billion a year by the end of 2021, at a cost to taxpayers of an additional €11 million per month.