Malta’s Budget compliant with Stability and Growth Pact

Malta is among ten Member States – Germany, Ireland, Greece, Cyprus, Lithuania, Luxembourg, Malta, Netherlands, Austria, and Finland –, whose Draft Budgetary Plans are found to be compliant with the Stability and Growth Pact in 2019, the Commission announced yesterday.

For three Member States – Estonia, Latvia and Slovakia –, the DBPs are found to be broadly compliant with the Stability and Growth Pact in 2019. For these countries, the plans might result in some deviation from the country's medium-term budgetary objective or the adjustment path towards it.

For four Member States – Belgium, France, Portugal and Slovenia –, the DBPs pose a risk of non-compliance with the Stability and Growth Pact in 2019. The DBPs of these Member States might result in a significant deviation from the adjustment paths towards the respective medium-term budgetary objective.

Spain's headline deficit is projected to fall below 3% next year and the country is set to exit the Excessive Deficit Procedure, which means that Spain would become subject to the preventive arm of the Pact as of next year. In this context, the DBP presented by Spain is found to be at risk of non-compliance with the Stability and Growth Pact in 2019.

The Commission has also taken a number of steps under the Stability and Growth Pact.

For Italy, the Commission has carried out a new assessment of the prima facie lack

of compliance with the debt criterion. At 131.2% of GDP in 2017, the equivalent of

€37,000 per inhabitant, Italy's public debt exceeds the 60% of GDP reference value of the Treaty.

This new assessment was necessary because Italy's fiscal plans for 2019 represent a material change in the relevant factors analysed by the Commission last May. Overall, the analysis suggests that the debt criterion as defined in the Treaty and in Regulation (EC) No 1467/1997 should be considered as not complied with, and that a debt-based Excessive Deficit Procedure is thus warranted.

For Hungary, the Commission has estab- lished that no effective action was taken in response to the Council recommendation of June 2018 and proposes that the Council adopts a revised recommendation to Hungary to correct its significant deviation from the adjustment path towards the mediumterm budgetary objective.

For Romania, the Commission has established that no effective action was taken in response to the Council recommendation of June and proposes that the Council adopts a revised recommendation to Romania to cor- rect its significant deviation from the adjustment path towards the medium-term budgetary objective.

The Commission has adopted the first report for Greece under the enhanced surveillance framework that was put in place following the conclusion of the European Stability Mechanism stability support programme on 20 August. The report concludes that the DBP for 2019 Greece has presented ensures compliance with its commitment to achieve a primary surplus of 3.5% of GDP. Progress with reforms in other areas is found to be mixed and the authorities will need to accelerate implementation to meet their objectives.

The activation of policy-contingent debt measures, agreed as part of the significant package of debt measures agreed at the Eurogroup meeting of 22 June 2018, will be contingent on a positive assessment in the second report under the enhanced surveillance framework. This report will be published early next year.