Recommendation for a COUNCIL DECISION abrogating Council Decision (EU) 2024/2128 on the existence of an excessive deficit in Malta
Date: 2026-06-03
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Malta, budget deficit, economic policy, economic reform, gross domestic product, public debt, public finance, stability pact

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   EUROPEAN COMMISSION  Brussels, 3.6.2026  COM(2026) 303 final  Recommendation for a COUNCIL DECISION abrogating Council Decision (EU) 2024/2128 on the existence of an excessive deficit in Malta   
 
 
Recommendation for a 

COUNCIL DECISION 

abrogating Council Decision (EU) 2024/2128 on the existence of an excessive deficit in 
Malta 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union  (TFEU),  and  in 

particular Article 126(12) thereof, 

Having regard to the recommendation from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

Article  126(1)  of  TFEU  provides  that  Member  States  are  to  avoid  excessive 
government deficits. 

The Stability and Growth Pact is based on the objective of sound government finances 
as  a  means  of  strengthening  the  conditions  for  price  stability  and  for  strong, 
sustainable and inclusive growth underpinned by financial stability, thereby supporting 
the  achievement  of  the  Unions's  objectives  for  sustainable  growth  and  employment. 
The Stability and Growth Pact includes Council Regulation (EC) No 1467/97 of 7 July 
19971  on  speeding  up  and  clarifying  the  implementation  of  the  excessive  deficit 
procedure, which was  adopted in  order to  further the prompt correction  of excessive 
general government deficits. 

On 26 July 2024, the Council adopted Decision (EU) 2024/21282 under Article 126(6) 
TFEU  on  the  existence  of  an  excessive  deficit  in  Malta  due  to  non-compliance  with 
the deficit criterion. 

On  21  January  2025,  the  Council  adopted  a  Recommendation  under  Article  126(7) 
TFEU3  with  a  view  to  bringing  an  end  to  the  situation  of  an  excessive  government 
deficit.  The  Council  recommended  a  corrective  path  for  Malta  in  accordance  with 
Article 3(4) of Regulation (EC) 1467/97 with the following maximum growth rates of 
net expenditure4: 6.0% in 2025, 5.8% in 2026 and 5.8% in 2027. This corresponds to 

1  Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation 
of 
ELI: 
http://data.europa.eu/eli/reg/1997/1467/2024-04-30)  as  last  amended  by  Council  Regulation  (EU) 
2024/1264 of 29 April 2024 (OJ L, 2024/1264, 30.4.2024). 

procedure 

excessive 

2.8.1997, 

deficit 

209, 

(OJ 

the 

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2  Council Decision (EU) 2024/2128 of 26 July 2024 on the existence of an excessive deficit in Malta (OJ 

L 2024/2128, 01.08.2024, ELI: http://data.europa.eu/eli/dec/2024/2128/oj). 

3  Council  Recommendation  of  21  January  2025  with  a  view  to  bringing  an  end  to  the  situation  of  an 
excessive  deficit  in  Malta.  All  documents  related  to  the  excessive  deficit  procedure  of  Malta  can  be 
found  at:  https://economy-finance.ec.europa.eu/economic-governance-framework/stability-and-growth-
pact/corrective-arm-excessive-deficit-procedure/excessive-deficit-procedures-overview/Malta_en. 
4  According  to  Article  2(2)  of  Regulation  (EU)  2024/1263,  'net  expenditure'  means  government 
expenditure net of interest expenditure, discretionary revenue measures, expenditure on programmes of 

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the maximum cumulative growth  rates calculated with reference to 2023 of 13.8% in 
2025, 20.4% in  2026 and 27.4% in  2027. These  are the same annual  and cumulative 
growth  rates  for  2025-2027  set  in  the  Recommendation  endorsing  the  national 
medium-term fiscal-structural plan of Malta.5 Based on the Commission Autumn 2024 
Forecast  that  underpinned  this  recommendation  and  the  Commission  medium-term 
government debt projection framework, adherence to this corrective path was expected 
to lead to a deficit no longer exceeding the 3% of GDP reference value by 2027. 

(5) 

(6) 

(7) 

In accordance with Article 126(12) TFEU, a Council decision on the existence of an 
excessive  deficit  is  to  be  abrogated  when  the  excessive  deficit  in  the  Member  State 
concerned has, in the view of the Council, been corrected. 

In  accordance  with  Article  4  of  Protocol  No  12  on  the  excessive  deficit  procedure, 
annexed  to  the  Treaty  on  European  Union  and  the  TFEU,  the  Commission  provides 
the  data  for  the  implementation  of  the  excessive  deficit  procedure.  As  part  of  the 
application of that Protocol, Member States are to report data on government deficits 
and debt and other associated variables twice a year, namely before 1 April and before 
1 October, in accordance with Article 3 of Regulation (EC) No 479/20096. 

The Council takes a decision to abrogate a decision on the existence of an excessive 
deficit on the basis of data provided by the Commission. A decision on the existence 
of  an  excessive  deficit  due  to  non-compliance  with  the  deficit  criterion  should  be 
abrogated only if the deficit has been brought below the 3% of GDP reference value 
and  the  Commission  forecasts  indicate  the  deficit  to  remain  so  in  the  current  and 
following year, in accordance with Article 8(3) of Regulation (EC) No 1467/97. 

(8) 

Based on data provided  by the Commission (Eurostat) in accordance with Article 14 
of Regulation  (EC) No 479/2009,  following the April 2026 reporting  by  Malta7,  and 
by the Commission Spring 2026 Forecast, the following conclusions can be drawn: 

–  After reaching 3.4% of GDP in 2024, the general government deficit fell to 2.2% 
of  GDP  in  2025,  thus  below  the  3%  of  GDP  reference  value.  The  government 
deficit in 2024 included a sizable capital transfer to the national airline company. 
Notwithstanding the non-repetition of that capital transfer, government expenditure 
grew substantially in 2025, including as a result of sizeable increases in spending 
on intermediate consumption and compensation of employees, as well as a one-off 
expenditure arising from a court decision. The decrease in the deficit was therefore 
mainly  driven  by  strong  government  revenue  growth,  driven  by  nominal  GDP 
growth and significant tax windfalls. Compared with the planned deficit for 2025 

the  Union  fully  matched  by  revenue  from  Union  funds,  national  expenditure  on  co-financing  of 
programmes funded by the Union, cyclical elements of unemployment benefit expenditure, and one-off 
and other temporary measures. 

5  Council recommendation of 21 January 2025 endorsing the national medium-term fiscal-structural plan 

of Malta, (OJ C, C/2025/649, 10.02.2025, ELI: http://data.europa.eu/eli/C/2025/649/oj). 

6  Council  Regulation  (EC)  No  479/2009  of  25  May  2009  on  the  application  of  the  Protocol  on  the 
excessive  deficit  procedure  annexed  to  the  Treaty  establishing  the  European  Community  (OJ  L  145, 
10.6.2009, p. 1) as last amended by Commission Regulation (EU) No 220/2014 of 7 March 2014 (OJ L 
69, 8.3.2014, p. 101–101). 
See  Eurostat  Euro  indicators  of  22  April  2026  https://ec.europa.eu/eurostat/web/products-euro-
indicators/w/2-22042026-ap 

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(9) 

reported  in  the  October  2025  reporting,  the  2025  deficit  was  1.1  pps.  of  GDP 
lower, due to lower-than-planned investment spending and stronger-than-expected 
revenues from corporate taxation.  

–  The Commission Spring 2026 Forecast projects a deficit of 2.2% of GDP in 2026 
and 2.1% of GDP in 2027, thus indicating that the deficit would remain below the 
3% of GDP reference value. The projection of a broadly stable deficit ratio reflects 
expectations of continued sizeable expenditure growth, including as a result of the 
higher  cost  of  energy  subsidies,  offsetting  higher  revenues  from  favourable 
economic conditions. In the April 2026 reporting, Malta reported a planned general 
government deficit for 2026 that would decline to 1.6% of GDP. 

Based on Commission calculations8, net expenditure in Malta grew by 5.6% in 2025 
and 22.2% cumulatively over 2024 and 2025. The net expenditure growth rate in 2025 
is below the recommended annual maximum growth rate. However, when considering 
2024  and  2025  together,  the  cumulative  growth  rate  of  net  expenditure  is  above  the 
recommended maximum growth rate, corresponding to a deviation of 2.3% of GDP in 
cumulative  terms.  The  high  net  expenditure  growth  rate  in  2024  was  driven  by  the 
above-mentioned  capital  transfer  to  the  national  airline  company.  Net  expenditure  in 
Malta is projected to grow by 6.1% in 2026 and 29.7% cumulatively over 2024, 2025 
and  2026.  The  projected  net  expenditure  growth  rate  in  2026  is  above  the 
recommended maximum growth rate, corresponding to a deviation of 0.1% of GDP in 
annual  terms.  When  considering  2024,  2025  and  2026  together,  the  projected 
cumulative growth rate of net expenditure is  also above the recommended maximum 
growth rate, corresponding to a deviation of 2.2% of GDP in cumulative terms. 

(10)  The government debt-to-GDP ratio increased from 45.9% at the end of 2024 to 46.4% 
of  GDP  at  the  end  of  2025,  thus  remaining  below  the  60%  of  GDP  reference  value. 
The Commission Spring 2026 Forecast projects it to decrease to 46.2% by the end of 
2026,  driven  by  the  lower  primary  deficit  and  the  ‘snowball  effect’  from  real  GDP 
growth and inflation. 

(11) 

In  the  view  of  the  Council,  the  excessive  deficit  in  Malta  has  been  corrected  and 
Decision (EU) 2024/2128 should therefore be abrogated. 

(12)  The  abrogation  of  Council  Decision 

the  Council 
Recommendation  of  26  July  2024  under  Article  126(7)  TFEU  obsolete.  Instead,  the 
Council  Recommendation  of  21  January  2025  endorsing  the  national  medium-term 
fiscal-structural plan of Malta continues to apply; therefore, Malta should ensure that 
net expenditure growth does not exceed the recommended maxima set out in point 1 
and Annex I of that Council Recommendation. 

(EU)  2024/2128  makes 

8 

Fiscal Statistical Tables providing background data relevant for the assessment of the budgetary policies 
of the Member States, SWD(2026) 200 final, Brussels, 3.6.2026. 

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HAS ADOPTED THIS DECISION:  

Article 1 

From  an  overall  assessment  it  follows  that  the  excessive  deficit  situation  in  Malta  has  been 
corrected.  

Decision (EU) 2024/2128 is hereby abrogated.  

Article 2 

This Decision is addressed to the Republic of Malta. 

Article 3 

Done at Brussels, 

For the Council 
The President 

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