Finance Minister Clyde Caruana may no longer be able to continue to take cheap loans to plug budgetary holes as the EU is set to reintroduce its fiscal discipline regime at the start of the year.
EU ministers are currently squabbling on the fine details of a reinvigorated Stability and Growth Pact and are expected to reach a compromise by the end of December.
It is likely that countries such as Malta, with a current annual deficit over 3% of GDP threshold, will be obliged to cut their annual deficit by at least 0.5% every year until they come back in line.
MEPs and the EU’s Council of Ministers are currently discussing the new pact, with France and Germany at loggerheads over how long defaulting countries will be given to correct their position.
A decision is expected to be reached at an EU summit this week.
EU experts told The Shift that reintroducing fiscal discipline rules, suspended a few years ago to allow countries to deal with the COVID-19 pandemic, will force Caruana to scale back spending and borrowing drastically.
Over the last three years, Malta has borrowed billions of euro, albeit at low interest rates, to keep its economy afloat.
Between 2020 and 2023, the government led by Prime Minister Robert Abela increased the national debt by over €3 billion, reaching a record high of almost €11 billion.
This caused the country to divert significantly from its low annual deficit record, reaching a staggering 10% of the GDP during the pandemic.
According to the latest figures, despite record GDP growth, Caruana still depends heavily on borrowing despite rising interest rates.
Instead of reining in the deficit and restricting spending, Caruana plans a deficit of 4.5% in 2024, causing debt to rise further to 55.3% in 2024, up from 52.8% this year.
No concrete measures have been taken in the budget to lower government spending next year.
That means that the honeymoon is over. May I ask who gained most from the honeymoon? Greedy business people, building developers, government contractors beneficiaries of direct orders , the pigs of Animal Farm ?
The tragedy is that the government has borrowed millions of Euro and there is nothing to show for it.
Oh there is what to show for it:
Bad governance;
No transparency;
Traffic jams galore;
Regular unexplained overruns on government project, that have a start date but no fixed finishing date;
Bad workmanship and millions more to rectify these;
Civil Service, Government Entities and Government controlled companies that are to say the least, inefficient and outright corrupt;
Corruption on a national scale;
Enormous salaries and perks for incompetent people, whether of trust or friends of friends;
A judicial system that has resulted in a huge delays in justice being done;
The lowering of the standard of living and quality of living of life for the majority with the consequence that the minority pig out to their heart’s content.
The supposed investment by sharks that have cost millions with little or zero return.
The list is endless.
of course there is – THE OLIGARCHS AND PEOPLE OF TRUST BANK ACCOUNTS.
Load of corrupt trolls thanks to the most corrupt xpm and his xcosultant.
Wow, how’s he going to tell Abela who’s writing his everything for free policies for election time? The trough is going to look a bit spartan, a lot of the brown mouths are going refuse the phantom jobs that are / were available. Gahans will have to go on the dole!! No worries Ghrixti will get them a note to save them the embarrassment of queueing for their tickets. Most likely they will do fuck all and just empty BOV.
Kindly use the Maltese plural of Gahan which is Ighna it sounds more effective
Just wait until the price rises coming from the new ‘carbon tax’ in 2024. Those EU taxes will cause all transportation prices to increase and then of course the greedy importers will add on even more percentage and then the outlets as well. We are going to be looking at a 25%-50% price increase on ALL imported goods. Even the piggies can’t escape that one. Eventually even their own voters will feel the pinch and the government will have no stolen money to give them. Then we will see who thrives and who starves.
For the majority of Maltese voters, the winter of discontent is round the corner. No more ‘freebies’, and guess what- It’s the EU’s fault, not the unbridled spending by the dilettantes in power.