Malta's exit from the European Union's Excessive Deficit Procedure is undoubtedly good news. It is an achievement that deserves recognition, not only because it improves the country's standing within the European Union but also because it signals that public finances have moved back within accepted fiscal parameters earlier than anticipated.

The European Commission's decision to remove Malta from the procedure after only two years is particularly significant because the country had originally been expected to take up to four years to return its deficit below the 3% threshold. Instead, Malta managed to reduce it to 2.2%, becoming the first country among those placed under the procedure in 2024 to emerge from it.

Prime Minister Robert Abela and Finance Minister Clyde Caruana were naturally eager to celebrate the development. They presented it as proof that the government's economic model works: protecting households and businesses through energy subsidies, avoiding austerity, maintaining economic growth and, at the same time, restoring fiscal discipline.

There is merit in that argument. Malta's economy has continued to expand while many European economies have struggled with stagnation. Employment remains high, unemployment remains low and economic growth forecasts continue to place Malta among the strongest performers in the European Union.

Yet while government is entitled to celebrate this milestone, it should not treat it as a final destination. It is merely one stage in a much longer journey.

The most striking statement made during Thursday's press conference was Prime Minister Abela's categorical pledge that Malta "will absolutely not return" to the Excessive Deficit Procedure. It was an unusually definitive commitment in a political environment where leaders often leave themselves room for manoeuvre.

Such certainty has consequences. The Prime Minister has effectively set a benchmark against which his government will now be judged. If Malta were to find itself back under excessive deficit procedures in the coming years, that statement would inevitably return to haunt him.

For that reason, the pledge should not simply be applauded; it should be remembered.

Governments are often quick to take credit when indicators improve but more reluctant to accept responsibility when circumstances deteriorate. By making such a firm commitment, Abela has accepted ownership of Malta's fiscal trajectory. The public, the Opposition, independent institutions and the media should hold him accountable for it.

At the same time, there is another side to the story that received far less attention during the celebrations.

While the deficit has been reduced, Malta's debt continues to rise at an alarming pace. National Statistics Office figures published last week show that central government debt stood at almost €12 billion by the end of April, representing an increase of more than €1.1 billion in just one year.

Government argues that debt remains manageable because it represents around 46% of GDP, comfortably below the European Union's 60% threshold. It also insists that the debt burden will continue to decline as economic growth outpaces borrowing.

That may be true today. It may even remain true for the next few years.

However, debt cannot continue increasing indefinitely without consequences. The comfort offered by debt-to-GDP ratios depends heavily on sustained economic growth, favourable borrowing conditions and stable international circumstances. History repeatedly shows that these assumptions can quickly change.

Future governments, and ultimately future taxpayers, will bear the burden of today's borrowing decisions. The larger the debt mountain becomes, the more difficult it will be to navigate future crises without sacrificing spending priorities or increasing taxation.

Malta should therefore welcome its exit from the Excessive Deficit Procedure. It is a positive development and evidence that fiscal correction is possible without abandoning economic growth.

But celebration must not become complacency. The government's success in reducing the deficit is real. So too is the reality of a national debt approaching €12 billion.

The challenge now is ensuring that one achievement does not obscure the warning signs contained in the other.