It pleases absolutely no one to witness the current international economic situation unfolding around us. As the days get shorter, we are seeing governments around Europe enacting extensive legislation to control energy consumption, in view of climbing energy prices.

In Denmark, Christmas lights will only be switched on until 9pm, while in Finland, citizens are being encouraged to turn down their thermostats, take shorter showers and keep their much-loved sauna-time down to a minimum.

Locally government has chosen to take a diametrically opposed direction, guaranteeing what is being referred to as stability and peace of mind.

Naturally this is an extremely popular solution, designed by a government which has been extremely focused on safeguarding its popularity, no matter what. Prime Minister Robert Abela, like Joseph Muscat before him, evidently lacks the courage to acknowledge the elephant in the room and address the issues at hand.

On the contrary, this government is choosing to borrow from tomorrow to satisfy today. But what is this costing the country in real terms? What are the real threats we are exposing our economy to? What price will we have to pay in the future, for looking the other way today?

Finance Minister Clyde Caruana confirmed that the deficit is set to reach 5.8% of GDP this year, 0.2% above what was projected last year. That means that according to the Budget presented for 2023, Malta’s deficit is expected to increase from €955m this year to €980m next year.

This also is pointing in the direction that Malta could very well be entering an Excessive Deficit Procedure in 2024, if the EU reinforces the Maastricht criteria – something which hasn’t happened recently, due to the Covid pandemic.

Sadly, government’s own projections are already expected to fail staying within the parameters of the Maastricht criteria next year. In 2021, Malta’s deficit stood at 7.8%, which exceeded the 3% allowed by the Maastricht criteria, rather considerably. Last year, Malta’s deficit was the highest in the EU, coming in third for highest deficit in 2020. Minister Caruana confirmed during his Budget speech that Malta is expected to clock a deficit of 5.5% in 2023 and 4.2% in 2024.

The temporary suspension of the Maastricht criteria due to the extraordinary Covid-19 pandemic is expected to be lifted in 2024, exposing Malta to the rigour and scrutiny of the system once again. Our government will be facing an uphill struggle to reign in the excessive budget deficit to under 3% of GDP by the time the rules will be enforced once again.

Minister Caruana said that he expects Malta’s deficit to be sufficiently under control and under the 3% of GDP, by 2025, which might be close, but no cigar!

Government’s obstinate drive to be popular no matter what, coupled with its lack of imagination, may prove to spell trouble in the long run.

Once again, for the ninth year running, we haven’t heard one single phrase about the creation of new economic sectors. We saw no considerable investment in new niches that may be earmarked for growth tomorrow. We continue milking existing economic sectors such as iGaming, Aviation, Financial Services and Pharma – all sectors which were envisioned and created by Nationalist administrations decades ago. Yet we see no real ability to harness new ideas and create a solid structure to attract the leading players in the field, as was done in the afore-mentioned areas.

We may be seeing sporadic investments by private companies in new sectors, but surely this is not happening thanks to a grand vision of government, rather it is taking place in spite of.

On a final note, it wouldn’t have been so bad if we too introduced a modicum of policy to at least encourage the more sensible use of our precious energy. The Maltese saying goes aħjar uff inkella aħħ, which loosely translates to, better be slightly bothered than to suffer worse consequences at a later stage. It wouldn’t have been a miss to sensitise the public about the real cost of our energy and perhaps switch off the Christmas tree a bit earlier this year.

Alexander Mangion is vice mayor of Attard