Updated - EU not expected to impose spending cuts on Malta - Muscat

Updated to include two-year period to be granted for Malta to reduce its deficit. Prime Minister Joseph Muscat said this evening that in its decision tomorrow about placing Malta under an Excessive Deficit Procedure, the European Commission is not expected to impose spending cuts on the Maltese government. Speaking in parliament, Dr Muscat said the crucial element was not whether or not Malta was placed under such a procedure, but whether or not the European Commission actually imposed spending cuts on Malta, as had happened under then Finance Minister  Tonio Fenech, when he was told to cut €40 million from government spending. Subject to ratification tomorrow, the government had negotiated in a way which would not see the European Commission impose spending cuts. Instead, it would give the government the opportunity and the time to get matters on track by reducing the deficit to below 3% of GDP as it thought fit. This was a success, because the government had shown that it would continue to grow the economy and keep finances under control, Dr Muscat said. He argued that it was the performance of the previous government which had brought Malta to this situation. The EU had cast...