VALLETTA (MALTA) (ITALPRESS/MNA) – Malta’s 2026 budget is “at risk of material non-compliance” with European Council recommendations, the European Commission warned, raising concerns over the country’s path to exiting the excessive deficit procedure.
In its opinion on Malta’s draft budgetary plan, the Commission said cumulative expenditure growth exceeds what was agreed with the Council. Although Malta is set to keep its annual deficit below the 3% EU threshold—projected at 2.8% of GDP next year—the country is expected to overshoot the more stringent cumulative expenditure rule measured against 2023.
Net expenditure is forecast to rise by 27% by 2026, far above the 20.4% cumulative cap. This amounts to a deviation of 1.5% of GDP, well beyond the allowed 0.6% threshold.
The opinion follows Finance Minister Clyde Caruana’s Budget 2026 announcements, which included income tax cuts for parents, higher pensions and social benefits, and continued fuel and energy subsidies. Brussels noted that Malta has not begun winding down these subsidies, despite a June 2025 recommendation to do so.
European Commissioner Valdis Dombrovskis said the numbers place Malta at “risk of material non-compliance”, urging corrective action within the national budgetary process.
Malta is one of only two EU countries—alongside the Netherlands—flagged as at risk of material non-compliance under the new fiscal framework.
– Photo IPA Agency –
(ITALPRESS).
