Malta urged to end its energy subsidies
LA VALLETTA (ITALPRESS/MNA) – The European Commission has asked Malta to end its energy support measures to reduce its government deficit, and instead it is recommending the Maltese government means-tested support measures for energy price increases.
A Commission Opinion on Maltàs Draft Budgetary Plan warned that, as a result of hefty energy support measures, Malta has no related savings to be used to reduce the government deficit.
The EU Commission explained that the Draft Budgetary Plan of Malta is not fully in line with the Council Recommendation of 14 July 2023. The report declares: “the Commission invites Malta to wind down the energy support measures as soon as possible in 2023 and 2024”.
The previous council recommendation, published in May this year, had recommended that the Maltese government should wind down its energy support measures by the end of 2023, and to use the related savings to reduce the government deficit.
In case an increased energy prices necessitate fiscal support measures, the Council instead suggested using targeted measures to protect vulnerable households and firms.
The Commission’s 2023 Autumn Forecast predicted that Maltàs net budgetary cost of energy support measures at 1.6% of GDP in 2023. This will increase to 2% in 2024 and 1% the year after.
Budgetary projections have indicated that the government will spend around 320 million in fuel subsidies every year until at least 2026, or until Malta fixes its electricity supply.
Maltese Finance Minister Clyde Caruana has committed to maintaining the fuel subsidies until necessary to keep energy prices stable.
– photo Agenzia Fotogramma-