Commission recommends Excessive Deficit Procedure for Malta - seeks pension, healthcare reforms

The European Commission today recommended that Malta be placed under an Excessive Deficit Procedure. It also called for reforms in pensions and healthcare and sustainable public finances. The Commission recommends to the European Council that Malta should address its excessive deficit situation by 2014. Specifically, Malta should reach a headline deficit target of 3.4% of GDP for 2013 and 2.7% of GDP in 2014, which is consistent with an annual improvement of the structural balance of 0.7% of GDP in 2013, and 0.7% of GDP in 2014. This adjustment path would allow bringing the deficit below the 3% of GDP reference value by 2014 while at the same time ensuring that the debt ratio will approach the 60%-of-GDP reference value at a satisfactory pace. In a statement issued in Brussels, the Commission said: "Malta faces important entrenched challenges that affect the sustainability of its public finances and its potential growth, and it was one of the countries identified by the Commission as experiencing macroeconomic imbalances, pertaining in particular to the financial sector and public finances. "Malta made limited progress in implementing the 2012 country-specific recommendations. On...