The next few days are expected to be quite eventful with the government tonight presenting its budget for next year, a budget which is expected to be quite lacklustre from what has been proposed so far, and an EU summit on Thursday and Friday during which tighter budget rules, including fines for those EU member states who exceed the euro’s deficit and debt ceilings of three per cent and 60 per cent of GDP, respectively, are expected to be confirmed.

Tonight’s budget will be analysed in depth and discussed at length over the next few days. In the meantime, however, the expectation will reach its peak this evening as households and businesses follow the speech attentively to analyse how their future will be affected, positively or negatively, through the raft of measures which will be presented.

Without doubt, a certain degree of austerity will be found in the measures that will be implemented to contain the public debt and deficit. A clear indication of this was provided by the Finance Minister when he publicly requested other ministries to reduce their expenditure. Nevertheless, these measures are expected to be nowhere near as tough as those implemented in Greece a few months ago, and in the UK and France these past few days.

The strict rules which are expected to be approved later this week during the EU summit come at a time when Malta is perhaps among the best positioned member states to meet a deficit target of three per cent of GDP when compared to other EU member states. Nevertheless, excessive deficit procedures are currently in force against 15 out of 16 member states of the eurozone.

Turning to the wish list from a household point of view, it would be safe to presume that high on the list would be a decent increase in wages, especially for the breadwinner of the family, to make good for the inflation which has been experienced throughout this year, including significant hikes in energy rates. It is natural for every family to aim for a better standard of living. While an increase of €1.16 has been touted as the cost of living adjustment for next year, following the €5.82 of this year, the one-off welfare payment of €78 proposed by the Malta Employers Association for households earning less than €12,000 per year should be actively considered.

The wishes wistfully longed for by businesses, on the other hand, are much more demanding, judging by the proposals presented by the social partners to the government in the run up to today’s session in Parliament. Among the main concerns will be the increase in operating costs as a result of the cost of living wage increase. Businesses will also be wishing that effective measures are introduced to stimulate the economy which is gradually easing out of a recession. Another factor which now has to be taken into account, following the vote taken by the European Parliament last week, is the impact of the maternity leave directive which has increased maternity leave from 14 to 20 weeks, should this directive be approved by the member states.

Perhaps what the local economy requires most is an increase in productivity to match wage increases accordingly. For the past 10 years wages have increased without a relative increase in efficiency and this has undermined the country’s competitiveness.

These are just a few of the issues which the Finance Minister has had to consider during the past few months since he presented the pre-budget document for public discussion. The proof of the pudding is in the eating and only tonight will we be able to determine Government’s agenda for the forthcoming year.