Soovitus - COM(2026) 303

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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

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

government deficits.

(2) 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.

(3) 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.

(4) 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 the excessive deficit procedure (OJ L 209, 2.8.1997, 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). 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) 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.

(6) 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.

(7) 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). 7 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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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.

(9) 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 (EU) 2024/2128 makes 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.

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.

Article 2

Decision (EU) 2024/2128 is hereby abrogated.

Article 3

This Decision is addressed to the Republic of Malta.

Done at Brussels,

For the Council

The President