VALLETTA (MALTA) (ITALPRESS/MNA) – The European Commission is expected to recommend the closure of Malta’s excessive deficit procedure on Wednesday after the country successfully reduced its budget deficit below the EU’s 3% threshold.

Malta was placed under the procedure in 2024 when its deficit stood at 4.9% of gross domestic product, exceeding limits set by EU fiscal rules. The country was among seven EU member states facing disciplinary action over excessive deficits.

According to reports, Malta will be the only country removed from the procedure. The recommendation still requires approval by the Economic and Financial Affairs Council (ECOFIN) at its July meeting, although officials expect the decision to be formally endorsed.

The development follows a stronger-than-expected improvement in Malta’s public finances. In April, then-finance minister Clyde Caruana announced that the deficit had fallen to 2.2% in 2025, well below the EU ceiling and the first time it has done so since before the Covid-19 pandemic.

Malta’s deficit peaked at 8.7% in 2020 as the government introduced support measures to cushion the economic impact of the pandemic. In subsequent years, spending on energy subsidies and anti-inflation measures continued to weigh on public finances.

The European Commission’s latest forecasts indicate that Malta’s deficit will remain below the EU limit, easing slightly to 2.1% by 2027. Government projections suggest the country could achieve a balanced budget by 2029 or 2030.

Source: medNews