EU Council endorses Malta’s medium-term fiscal-structural plan

The Council of the European Union has endorsed Malta’s medium-term fiscal-structural plan.

In a statement on Tuesday, Ahe Council said that as the next step in the implementation of the EU’s new fiscal rules, it adopted recommendations endorsing the first-ever medium-term fiscal-structural plans and setting the net expenditure paths for 21 member states.

“The medium-term fiscal-structural plans are a cornerstone of the new economic governance framework. The plans contain member states’ fiscal trajectory, together with envisaged reforms and investments. They contribute to strengthening  member states’ debt sustainability and promoting sustainable and inclusive growth.”

Now that the Council has adopted its recommendations, member states have certainty as regards the budgetary paths they will follow in the upcoming years, and they can plan accordingly, the Council said.

The Council greenlighted the net expenditure paths and medium-term fiscal-structural plans of Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden. For the five member states that requested an extension of the fiscal adjustment period to seven years (Finland, France, Ireland, Italy and Romania), the Council also endorsed the set of reform and investment commitments underpinning this extension.

“A key objective of all plans is to ensure that, by the end of the fiscal adjustment period, general government debt is on a plausibly downward trajectory, or stays at prudent levels, and that the government deficit is brought and maintained below the reference value of 3% of GDP over the medium term. The standard fiscal adjustment period is 4 years. An extended 7-year fiscal adjustment period can lead to a lower fiscal adjustment need per year.”

In the document pertaining the Malta, the Council said of the country’s medium-term fiscal-structural plan, that it considers that its full implementation would be conducive to ensuring sound public finances and supporting public debt sustainability as well as sustainable and inclusive growth.

The Maltese Government welcomed the approval of the fiscal Budget for Malta by the European Council and notes this as a vote of confidence in its financial administration of the country, a statement by the finance ministry read.

“The European Union acknowledged the positive direction in which our country is working to address deficit reduction, investment through expenditure, and the country’s fiscal plan. This follows the Government’s presentation of a Budget involving significant investment measures in the people, including the tenth increase in pensions, another strong €250 increase per child in the Children’s Allowance, and the largest tax cut in history. This is in addition to the continued substantial assistance provided in the energy sector to ensure stability in electricity and fuel prices. The Budget aims for the country to move to the next level in light of important environmental and digital changes,” the ministry said.

It said that the government is committed to “continuing prudent financial administration with respect to strengthening the fiscal position while fostering economic growth that results in quality prosperity for Maltese and Gozitan families.”