The European Commission has formally recommended ending the excessive deficit procedure against Malta after the country successfully brought its fiscal deficit back below EU limits.

European Commissioner for the Economy Valdis Dombrovskis said the recommendation follows Malta’s reduction of its general government deficit to below 3 per cent of GDP in 2025, with projections showing it will remain under the threshold in both 2026 and 2027.

The Commission had launched excessive deficit procedures against Malta and six other EU member states in 2024, when Malta’s deficit stood at 4.6 per cent of GDP.

However, Malta reduced its deficit to 2.2 per cent in 2025. The Government now expects to lower it further to 1.6 per cent this year and 0.4 per cent by 2028, before returning to a balanced budget — or potentially a small surplus — in 2029 and 2030.

These estimates are based on “very conservative” estimates to account for prolonged uncertainty as a result of the Middle East war.

Malta’s exit from European excessive deficit procedures will still need to be confirmed by ECOFIN next July, although this is expected to be a formality.

The Maltese Government welcomed this recommendation, pointing out that the EU average deficit stands at 3.1 per cent, almost a whole percentage point higher than Malta’s.

Croatia, Italy, Finland, Bulgaria, Austria, Slovakia, Hungary, Belgium, France, Poland, and Romania are all currently facing excessive deficit procedures.