Abela urges EU action on energy as geopolitical tensions rise
Prime Minister Robert Abela has called on the European Union to act swiftly to address inflationary pressures, particularly in the energy sector, as geopolitical tensions in the Middle East continue to drive uncertainty. Abela stressed that Malta will continue shielding consumers from rising energy costs, arguing that island states face disproportionate burdens due to import dependency and higher logistics costs. He called for both immediate support measures and long-term structural reforms at EU level. The Prime Minister also highlighted Malta’s role in a coordinated initiative with southern European countries concerning maritime risks, including the Arctic Metagaz incident, warning of environmental and safety implications in the Mediterranean. He further pushed for de-escalation efforts in the Middle East and a stronger EU diplomatic stance, while cautioning that instability could increase migration pressures, requiring coordinated responses with origin and transit countries.
Government posts early-year surplus but debt levels edge up
Malta’s public finances registered a strong turnaround at the start of 2026, with the government posting a surplus of €229.6 million by the end of February, according to National Statistics Office figures. This marks a significant shift from the €95.1 million deficit recorded during the same period last year. The improvement was driven by a sharp rise in recurrent revenue, which climbed to €1.56 billion. Income tax accounted for the largest increase, followed by VAT and grants, reflecting sustained economic activity and improved tax collection. At the same time, government expenditure rose to €1.33 billion, largely due to higher spending on social benefits, public sector wages, and operational costs. Increased investment in infrastructure, digitalisation, and environmental projects also contributed to higher capital expenditure. Despite the surplus, central government debt continued to rise, reaching €11.4 billion, highlighting ongoing fiscal pressures.
Opposition VAT pledge welcomed by industry lobby but Finance Minister expresses doubts
The Association of Catering Establishments has welcomed a pledge by Alex Borg to reduce VAT on restaurants and kiosks to 7%, but has urged careful planning before implementation. The proposal, promised within the first 100 days of a future Nationalist government, has long been a priority for the industry. ACE said it has invited the Opposition for discussions to better understand how the measure would be rolled out. At the same time, it confirmed ongoing talks with government aimed at ensuring any reform is part of a broader, coordinated approach involving fiscal authorities and regulatory structures. However, Finance Minister Clyde Caruana has questioned the proposal, warning it could cost around €140 million annually. He also argued the measure may not translate into lower prices for consumers, noting the primary benefit would be to operators rather than the public.
