On the 14th July, Malta adopted the European Commission's country-specific recommendations that were issued earlier on this year in the Commission's report. The recommendations for Malta focus primarily on education, pensions, public finances and SME's access to funding.
A representative, during a meeting with the Malta Council for Economic and Social Development explained that certain recommendations make part of highly specific sectors such as energy and the environment. Malta is currently heavily investing in these sectors and it is foreseen that present investment will present desirable returns for the country's economic and social growth in the future.
Malta's focus with regards the EC's country-specific recommendations will be on a short-term basis whereas longer term policy will be addressed separately. The time frame within which the specific recommendations will be addressed is between the coming 12 to 18 months. Helena Dalli, minister for social dialogue stated that the recommendations point out to what Malta is able to achieve rather than the issues it is currently experiencing.
According to the Commission's report, the recommendations in relation to education resulted from Malta's relatively high rates in early school leaving and relatively low literacy rates. In parallel with this, Malta is currently strengthening its efforts at improving the education system and also closing the skills gap in its labour force so as to boost its highly able labour market and establish the island as a centre of excellence.
The report also highlighted the issue of pensions' sustainability. At present, Malta's retirement age does not reflect the actual life expectancy age and this will render the pension system unsustainable in the near future. Unless Malta's retirement age is augmented to reflect current life expectancy, the government would need to look at alternative solutions, such as auto-enrolment.
Malta also needs to strengthen its fiscal framework and intensify its effort at addressing fiscal issues, particularly tax evasion and public debt. After recently updating Malta's economic growth rating from 'stable' to 'positive', Standard and Poor's stated in their country report that Malta's rating could be improved further is the government managed to execute its budgetary plan earlier than expected and if there are no slippages in addressing fiscal matters. With regards to this, along the previous months Malta signed a MoU with Italy about tax matters so that the countries can collaborate and Malta will be able to adopt best practices in the sector.
During the Meeting with the Council for Economic and Social Development the representative also pointed out that Malta's deficit dropped to 2.1% in 2014 from 2.6% in 2013, however public debt still stood at over 60%. On a positive note, however, Malta is expecting to reach a good balance by 2019 after having decided on its own objectives.
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