Along with other EU Member States especially members of the Eurogroup, Malta now finds itself living in a completely different dimension with regards to public finances.

The events of the past years have reinforced the move by EU and especially Eurogroup countries towards greater integration.

Gone are the days when each country acted independently of the others. These are the times of greater integration as the eurozone countries come together to bolster the common currency and to create, really create a single market.

The flipside of this is the requirement that the member states come together to an extent unseen before including a list of rules regarding the national budgets.

The experience, bitter as it was, of the crisis years, has taught the European countries the need for two benchmark levels - that of the deficit and that of the debt - and the need to keep these two benchmarks and observe them. One may observe that one reason why Europe suffered such a difficult crisis was because the rules were laxly observed and two or three founding fathers played games with the rules.

Europe has now given itself a whole complex procedure to ensure this does not happen again. This is called the Strategic Growth Pact and all signatories are called to show the pact is being observed by them.

Subsequently, for the past four years, the economies of the member states have been minutely examined in the annual round of the Macroeconomic Imbalance Procedure , to identify imbalances that hinder the smooth functioning of the member states' economies and to spur the right policy responses. The Alert Mechanism Report identifies member states that may be affected by imbalances in need of policy action and for which further in-depth reviews should be undertaken.

Macroeconomic imbalances remain a serious concern and underline the need for decisive comprehensive and coordinated policy action. High and unsustainable current account deficits have thus been considerably reduced, eliminated or turned into surpluses and the process of balance sheet repair is progressing in all sectors in most countries.

Furthermore, the recovery in competitiveness is encouraging, as a result of adjustments and reforms, but sustaining competitiveness remains a key concern in particular for member states with large external imbalances. The high levels of private and public debt in most countries, and the high external liabilities in many countries still constitute substantial vulnerabilities for growth, jobs and financial stability. Unemployment and other social indicators remain very worrying in several countries and economic growth has been insufficient to lead to a marked improvement in labour and social data.

On 28 November, the Commission announced that it will not, at this stage, carry out further analyses in the context of the MIP with regards, among others, to Malta, since the Commission is of the view that the macroeconomic challenges of Malta (and that of the others) do not represent imbalances in the sense of the MIP. However, careful surveillance and policy coordination are necessary on a continuous basis for all member states to identify emerging risks and put forward the policies that contribute to growth and jobs.

At the same time, as explained elsewhere in this issue, Malta is still under an Excessive Deficit procedure, even though it has very recently graduated from being in the corrective arm (where it could be fined) to the preventive arm.

Time and again the Commission has outlined the steps that Malta must take. To summarise: "The Commission is of the opinion that the Draft Budgetary Plan of Malta is at risk of non-compliance with the provisions of the SGP.

"Malta is currently under the corrective arm, but could become subject to the preventive arm from 2015 in case a timely and sustainable correction is achieved.

"According to the Commission's forecast, the structural effort in 2014 is far from what was recommended by the Council in the EDP recommendation, highlighting the risk that the correction of the excessive deficit may not be achieved, owing to the apparent lack of a sufficient effort to support it.

"Also, based on the Commission's forecast, compliance with the debt rule falls slightly short in 2014.

"Finally, a significant deviation from the adjustment path towards the MTO is to be expected in 2015 based on the Commissions forecast, according to both the structural balance and the expenditure benchmark, unlike in the Draft Budgetary Plan. '

"The Commission therefore invites the authorities to take the necessary measures within the national budgetary process to ensure that the 2015 budget will be compliant with the SGP.

"The Commission acknowledges that Malta has made some progress with regard to the structural part of the fiscal recommendations issued by the Council in the context of the 2014 European Semester.

"However , it invites the authorities to accelerate progress on the planned efforts to improve the financial sustainability of the healthcare system, to ensure that further pension reform measures are put in place and to ensure that the efforts to improve tax compliance and fight tax evasion yield the expected results."