Government remains committed to keep its deficit below the 3% threshold, and honouring its pledge to end 2013 with a deficit of 2.7%, as announced last month in the 2013 Budget.

Government notes the European Commission’s concern that the approved 2013 Budget “is expansionary” and as a consequence, “the deficit in 2013 is expected to widen to 3.7% of GDP”.

 

 

The Minister for Finance Prof. Edward Scicluna said “it must be recalled that the 2013 approved Budget is the same Budget which was submitted by the previous Government in November of last year and which forecasted a deficit of 1.7%. The Nationalist Government had then stated that the Budget for 2013 was evaluated and endorsed by the European Commission”.

“The only addition to the 2013 Budget was the inclusion of a number of collective agreements and other firm commitments undertaken by the previous Government at the beginning of this year prior to the elections, and for which no financial provision was made in the budget estimates.”

“Government is committed to honour collective and other agreements entered into by the previous administration prior to the elections”, he added.

Prof. Scicluna also noted that estimates carried out by the Ministry for Finance indicate that the deficit for 2013 will end in the region of 2.7%.

“Despite the Commission’s disappointing forecast, this Government remains committed to closing 2013 with a deficit of 2.7%, as was originally pledged in the 2013 Budget speech, and is confident that this can be achieved.”

“Government also notes that this further confirms how unrealistic the previous administration’s budget projection of 1.7% truly was and that Government was correct in revising it upwards when it presented the 2013 Budget in April.”

Government now intends to determine on what grounds the Commission reached its conclusion and is now forecasting a deficit of 3.7%, which is one percentage point higher than the Government’s own revision.

In this regard, both Deputy Prime Minister and EU Affairs Minister Louis Grech and Finance Minister Prof. Edward Scicluna are currently in Brussels for further discussions with European Commissioner for Economic and Monetary Affairs Olli Rehn.

 

– links –

        

 

Malta’s financial situation discussed in Brussels

    

 

 

 

 

– Friday, 3rd May, 2013