Malta’s Budget plan considered ‘not fully in line’ with EU advice due to energy subsidies

The European Commission has deemed Malta’s Draft Budgetary Plan for 2025 to be “not fully in line” with its recommendation because the government will not phase out energy subsidies by winter.

In a communication to the European Parliament, Council, and European Central Bank, the Commission said the Budgetary plans brought forward by Estonia, Germany, Finland, Luxembourg, Malta and Portugal are considered to be not fully in line with its recommendations.

In the case of Luxembourg, Malta and Portugal, the blame is placed squarely on energy emergency support measures that are not set to be phased out by winter 2024-2025, although their net expenditure growth is expected to be within regulations.

“Luxembourg, Malta and Portugal are the only euro-area Member States that received a country-specific recommendation to phase out the emergency energy support measures by winter 2024/25,” the Commission’s report said.

“For all three, the Commission concludes that they do not phase out these measures. As a result, the overall conclusion in the Draft Budgetary Plan opinion is adjusted from ‘in line’ (i.e., the assessment based on net expenditure growth) to ‘not fully in line’.”

Despite this, the Commission said that Malta’s fiscal plan still met EU requirements and “set out a credible fiscal path to ensure fiscal sustainability over the medium term”.

An excessive deficit procedure was opened against Malta in July this year because the country’s deficit remains higher than the 3% target.

The Commission had also already recommended that Malta should “wind down” its emergency support measures by winter.