Malta registers highest deficit in EU – austerity expected next year 

Malta is expected to be one of the first EU members states to have to impose obligatory austerity measures next year to get its public finances in order after the island registered the highest deficit in the EU for 2021.

According to the latest statistics compiled by the EU, and which will serve as European Commission’s benchmark for assessment and projections later on this year, Malta ended 2021 with a deficit of €1.2 billion, equivalent to 8% of GDP.

On average, the EU’s deficit stood at 4.7%, just over half Malta’s.

Chart showing Malta’s deficit over the years.

This means that Malta’s current deficit is five percentage points higher than Euro Area rules usually permit (3%). These have been temporarily relaxed for the duration of the Covid-19 pandemic, but are expected to be re-enforced next year.

Brussels sources told The Shift that with this level of deficit, Malta is expected to be included in an Excessive Deficit Procedure (EDP) next year, once the rules, better known as the Maastricht criteria, are back.

According to the latest published figures, while Malta increased its revenue to €5.4 billion in 2021, it spent more than €6.6 billion, having to rely on around €1.2 billion in new loans.

Chart showing Malta’s increase in debt since 2018.

The government’s measures to keep the economy afloat last year also increased substantially, meaning expenditure rocketed to 45.5% of GDP, an increase of as much as 10% since Robert Abela became Prime Minister.

While registering the EU’s highest deficit last year, Malta’s record is closely followed by Greece (-7.4%), Latvia (-7.3%) and Italy (-7.2%).

As a result, Malta’s general debt also shot up, reaching €8.2 billion by the end of 2021, equivalent to 57% of GDP.

In the last two years, helped by the government’s dependence on loans to boost the economy, Malta increased its debt by 17% or more than €3 billion. 

Still, in this area, Malta remains on ‘safe ground’ – EU debt alarm bells only start chiming once a country rises above the union’s threshold of 60% of GDP.

Although Malta’s debt levels are increasing at a steady pace, they’re still well below the EU’s average, which stood at 88.1% in 2021.

 

                           
                               
guest
13 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Janet Wojtkow
Janet Wojtkow
17 days ago

All those free cheques and an overstuffed cabinet!! When the pre-election bribe was announced, they maintained they had more money than expected. Now they’re in for another 5years, the gahans will have to start feeling the pain!!

Alexander
Alexander
17 days ago
Reply to  Janet Wojtkow

Free Cheques…lol!!! the gahans will have to start feeling the pain!!

Leone Brincat
Leone Brincat
17 days ago
Reply to  Janet Wojtkow

Free cheques my foot. Only red eyed persons received them. Blue eyed never received anything.

saviour mamo
saviour mamo
17 days ago

It is of no solace to know that the debt is below the EU average. Debt is debt and has to be payed back. The government should spend less and start by reducing the number of ministries. A Cabinet of 23 persons is extravagant.

KLAUS
KLAUS
17 days ago

Idiots and liars paid as if they were geniuses.
Not a day goes by that one does not have to be ashamed of this “government”.
If I compare the 100 largest cities in Europe with Malta, then Malta is in 93rd place. So small.
When I see the Bloody Golden Passport…. So outrageous.
When I see the ROBBER Abela with his businesses. It is so sad. He is the wrong one!
We don’t even have a place for corruption and money laundering. So disgusting.
Corrupt Idiots and liars paid like they are geniuses.

Winston Smith
Winston Smith
17 days ago

People always get the government they deserve.

Evelyn Vella Clark
Evelyn Vella Clark
17 days ago
Reply to  Winston Smith

I don’t deserve it, but unfortunately I got it!!!!!!

Winston Smith
Winston Smith
17 days ago

You are right, I am enjoying a seat in the same sinking boat.

KLAUS
KLAUS
17 days ago
Reply to  Winston Smith

We have a propaganda television disguised as public television.
We have propagandists for the PL disguised as journalists, paid by Maltese money.
Please do not condemn the ordinary people, condemn these manipulations.

No, this government is not a government for Maltese people.
It is a kind of Mafia. No one deserve a Mafia as Government. No one.

Godfrey Leone Ganado
16 days ago

Malta’s GDP can be considered as ‘creative’ as it is inflated with the remuneration given to around 1,000 additional persons employed in the public sector for political reasons, that is ‘jobs for votes’, and not because there was a ‘business case’ for additional employees.
Without this additional ‘created’ income, the GDP would have been lower, and the deficit expressed as a percentage of GDP, would have resulted in a percentage higher than the 8% reported.

Alexander
Alexander
16 days ago

That’s right. More than half of employees in the public sector are useless. How is it that one day you are selling pastizzi and the next you have a 40k salary with Transport Malta as Manager or Senior Manager?

GDP my foot!

Macchiavelli
Macchiavelli
16 days ago

So now labour will realise that you cannot fool all of the people all of the time. The only problem is that thanks to labour’s rotten policies most of us will suffer. Not the mafiosi of course.

Albert Mamo
Albert Mamo
16 days ago

WELL THE FREE MONEY EXTRAVAGANZA IS OVER AND NOW FOLKS, ITS TIME TO FACE REALITY…TAXES

Related Stories

Mario Cutajar recruited personal ‘image booster’ at €40,000 a year
Outgoing Principal Permanent Secretary Mario Cutajar used taxpayer funds
The labours of Clyde: A memo to the finance minister
Finance Minister Clyde Caruana has issued a stark warning:

Our Awards and Media Partners

Award logo Award logo Award logo Award logo