Economic Partnership Programme of Malta - Main contents

EN

Official Journal of the European Union

C 371/1

The Stability and Growth Pact (SGP) aims at securing budgetary discipline across the Union and sets out the framework for preventing and correcting excessive government deficits. It is based on the objective of sound government finances as a means of strengthening the conditions for price stability and for strong sustainable growth underpinned by financial stability, thereby supporting the achievement of the Union's objectives for sustainable growth and jobs.

Regulation (EU) No 473/2013 sets out provisions for enhanced monitoring of budgetary policies in the euro area and for ensuring that national budgets are consistent with the economic policy guidance issued in the context of the SGP and the European Semester. Since purely budgetary measures might be insufficient to ensure a lasting correction of the excessive deficit, additional policy measures and structural reforms may be required.

Article 9 of Regulation (EU) No 473/2013 sets out the detailed arrangements for economic partnership programmes, to be submitted by Member States whose currency is the euro under an excessive deficit procedure. Setting out a roadmap of measures to contribute to an effective and lasting correction of the excessive deficit, the economic partnership programme should specify the main fiscal-structural reforms, in particular those referring to taxation, pension and health systems and budgetary frameworks.

On 21 June 2013, the Council adopted Decision 2013/319/EU (2) whereby Malta was the subject of an excessive deficit procedure. In this context, Malta was requested to present an economic partnership programme by 1 October 2013.

On 1 October 2013, and within the time frame established by Regulation (EU) No 473/2013, Malta presented to the Commission and to the Council its Economic Partnership Programme, setting out structural reforms that aim at strengthening public finances and, more broadly, complying with the 2013 country-specific recommendations (CSRs) addressed to Malta by the Council Recommendation of 9 July 2013 (3) (‘Council Recommendation of 9 July 2013’): (i) ensuring public finance sustainability (CSR 1, 2 and 4); (ii) enhancing the efficiency of the public administration (CSR 2 and 5); (iii) raising potential output, while enhancing competitiveness and promoting a diversified and balanced economy (CSR 2, 3 and 4); and (iv) safeguarding financial stability (CSR 5).

The fiscal-structural measures that Malta plans to implement are the following: (i) reform of the fiscal framework; (ii) a spending review at ministry level; (iii) taking the pension reform further by introducing a third pension pillar; (iv) measures to improve the provision of services in the health sector; (v) restructuring of State-owned enterprises; (vi) increasing the efficiency of the public administration; and (vii) gradually shifting the burden of taxation from direct to indirect taxes. The set of measures is broadly adequate and could be expected to contribute to the strengthening of the public finances. Nevertheless, further efforts in some areas, such as ensuring the long-term sustainability of public finances, appear...