Government MP and economist Alex Muscat said that not only should Malta ignore the European Commission's calls to cut out its energy subsidies, but rather, "Europe should imitate us at EU level."

In an interview with this media house, the former parliamentary secretary praised Malta's energy subsidies for keeping electricity bills low to all households and called for the European Union to formally take up the idea for the other 26 EU countries.

While discussing the state of the Maltese economy vis-à-vis the energy subsidies, not only did the PL backbencher commend them, but when the European Commission's calls for Malta to end them were mentioned, Muscat stated that "rather than chastising Malta for the assistance we are providing on energy, Europe should imitate us at EU level."

The European Commission had recommended for Malta to stop giving out its energy subsidies in its formal warnings on the country's excessive budget deficit.

On Wednesday, 21 January, Finance Minister Clyde Caruana told the Parliament of Malta that according to the government's present fiscal indications (to be formally published in April), the Maltese government has managed to lower its budget deficit to below 3% by the end of 2025. If this holds true, this means that Malta has managed to correct its national finances to abide by EU fiscal rules, in accordance with the excessive budget deficit procedure placed on it in just two years instead of the stipulated four.

Muscat said that with "freezing cold" temperatures in mainland Europe, European governments should help their citizens when not everyone is managing to keep their homes warm.

The PL MP said that austerity, in its bid to reduce public expenditure, contracts the economy instead of expanding it. He referenced the financial difficulties that have persisted in many European countries since the pandemic and contrasted that the Maltese government has helped the Maltese economy bounce back more quickly by pumping money into large infrastructural investments ("the biggest infrastructural investment we ever saw as a country") and "unprecedented" assistance via COVID-19 supplements.

Muscat - an economist by profession - described a dual purpose for the energy subsidies. Aside from just keeping bills low, he noted that these energy subsidies serve as a cash injection into the Maltese economy, since "the money remaining in people's pockets is being used to generate economic activity."

Henceforth, he called for other national governments within the European Union to introduce these subsidies themselves to not only assist EU citizens in much colder temperatures farther north, but also as a way to uplift the stagnant economic growth present in several mainland European economies.

"Instead of chastising us and telling us what we should do about our energy subsidies, I think it should see the good we are doing and realise that, at this point in time, it makes sense that, collectively in Europe, we should protect European consumers and help them pay their energy bills, in my opinion. Money in [people's] pockets, as it is working for Malta, would work for the rest of Europe. If European families have more money in their pockets, they have more purchasing power," Muscat said.

"This is a time where all of Europe must not fear from investing in its people. When you reduce your consumption and spending, your quality of life will go down. What we are doing is the other way around; we are putting money in people's pockets," Muscat said.

Disagreeing with the general EU direction on fiscal policies, in line with the Maltese government's discourse, Muscat stated that "we believe that now isn't the time to place austerity measures, but rather to support people so that they generate economic activity." He observed that instituting austerity measures places financial burdens onto families, putting them "under shock."

Maltese government routinely exceeds its own financial targets, Muscat says

Muscat also told this newsroom that "from 2013 onwards, the [financial] targets we set for ourselves for what should be the debt and deficit have always been achieved," aside for pandemic times.

"We always managed or performed better than anticipated," he added.

The PL MP continued that the Maltese economy has consistently outgrown forecasts shared by Finance Minister Clyde Caruana. Additionally, the same could be said for the national debt, Muscat said, in that the national debt is "typically less than anticipated" in comparison to initial forecasts.

Malta's national debt has been increasing to new all-time highs month after month. The latest NSO report published this January, for September 2025, issued that the government's debt stood at €11.2 billion, which marks a year-on-year increase of €1 billion from the corresponding quarter in 2024.

Regarding criticisms on the country's rising debt, Muscat stated that he'll only be concerned when the government stops reaching its targets.

Muscat praised how Malta's national finances have been handled over these past PL administrations. He noted that the national debt can only be analysed with respect to how much national finances can handle, which ties to how much money a country is making and how much the government is earning.

Despite concern on this record-breaking debt, Malta's national debt is just 46.5% the country's GDP; EU fiscal rules advise for countries' debt-to-GDP ratio to sit below 60% in excessive deficit procedures. In the EU overall, for the Q3 2025, the general government gross debt to GDP ratio sat at 82.1%. For the Euro Area, this ratio stood at 88.5%.

The PL MP pointed out that, at one point, in 2013, Malta's debt amounted to 70% of its total GDP, and that now, "the government's financial position is much better than it was 13 years ago."

He is "convinced" that if Malta keeps trending so well financially, Malta will keep growing to levels people wouldn't believe.

Muscat was asked whether Malta's economy is truly performing as well as advertised or if maybe we are living in denial as the national debt continues to reach new all-time highs, the Maltese economy is emerging from excessive budget deficit procedures, and the government continues to finance significant energy subsidies to ease the burden of utility bills on citizens amidst sustained increasing cost of living.

He stated that "for the past 10 years, we were practically best in class when it comes to economic performance; best in class even in financial management," mentioning praise received from the European Commission, the IMF, and the World Bank.

The first part of the interview was carried yesterday