Malta confirmed to exit EU excessive deficit procedures 

The European Commission has formally recommended dropping excessive deficit procedures against Malta.

European Commissioner for the Economy Valdis Dombrovskis said he is making this recommendation after Malta reduced its general government deficit below 3 per cent of its GDP in 2025 and it is projected to remain below that threshold in 2026 and 2027. 

The EC launched excessive deficit procedures against Malta and six other EU countries in 2024, when the deficit stood at 4.6 per cent.

However, Malta reduced its 2025 deficit to 2.2 per cent, and the Government excepts to slash it further to 1.6 per cent this year and 0.4 per cent in 2028 before balancing the books – or even registering a small surplus – in 2029 and 2030. 

Then Finance Minister Clyde Caruana, who is currently waiting to see whether he will be re-confirmed in the role following the election, said in April that these numbers are based on “very conservative” estimates to account for prolonged uncertainty as a result of the Middle East war.

Malta’s exit from European excessive deficit procedures will still need to be confirmed by ECOFIN next July, although this is expected to be a formality.

The Maltese Government welcomed this recommendation, pointing out that the EU average deficit stands at 3.1 per cent, almost a whole percentage point higher than Malta’s.

EU countries under excessive deficit procedures include Croatia (a deficit of 3 per cent), Italy (3.1 per cent), Finland (3.4 per cent) Bulgaria (3.5 per cent), Austria (4.2 per cent), Slovakia (4.5 per cent), Hungary (4.7 per cent), Belgium (5.2 per cent), France (5.1 per cent), Poland (7.3 per cent), and Romania (7.9 per cent).

“Malta managed to achieve this result in a year in which it was the only European country that didn’t witness fuel, gas and electricity price hikes,” the Government pointed out. 

“The deficit was reduced as a result of economic growth, not austerity measures. Meanwhile the Government implemented Malta’s largest ever tax cut and announced significant increases to pensions and social benefits.”

Cover photo: European Commissioner for the Economy Valdis Dombrovskis (Photo: EC)