The European Commission has approved Malta’s budget for 2021, the government announced in a statement on Wednesday.
The government said that the Commission’s experts said that “most of the measures set out in the Draft Budgetary Plan of Malta are supporting economic activity against the background of considerable uncertainty”.
The Commission’s economists calculated that direct aid by the government amounts to 5.8%, along with 1.5% of the GDP being received for tax deferrals, and 2.8% in subsidised debt.
They also state that “the retained and new measures amount to some 2.2% of GDP and are concentrated on the expenditure side”.
They said that the report also mentions the wage supplement, the vouchers scheme, and a reduction in stamp duty, along with noting the improvement of family benefits and pensions.
The report also notes that the government is allocated funds to the environment with the aim of incentivising “the circular economy and transform Malta into a resource-efficient economy in line with the European Green Deal”.
The government said that while the Opposition leader said that the government’s estimates on public finances could not be believed, Commission experts had conclueded that the government’s estimations for public debt are “similar to the Commission’s projection” and will not exceed 60% of the GDP.
They noted how previous administrations had their projections discredited, to the point that the country was placed under excessive deficit procedures three times.
The Commission also states that “the evolution of the deficit in 2021 could turn out more favourable as a result of higher economic growth from the implementation of measures financed by the Recovery and Resilience Faciility”.
The government said that it welcomes the positive review and is looking forward to implementing the measures to sustain Maltese families and businesses.
Malta receives €120 million in loan from European Commission
In a separate statement meanwhile, The Ministry for Finance and Financial Services announced that yesterday Malta received from the European Commission a loan of €120 million nominal granted on favourable terms in respect of financial support that the European Union is giving to member states under the SURE Instrument.
This amount is part of the amount €243.6 million nominal that was allocated to Malta early this year in connection with the implementation of European Council decision regarding the establishment of an European instrument for temporary support to mitigate unemployment risks in an emergency (SURE) in response to the COVID-19 outbreak.
The European Commission will be disbursing the remaining loan amount to Malta in the coming months.