An analysis of the issues related to reducing national debt in Malta

Abstract

The dissertation carries out an analysis of the issues related to reducing national debt in Malta. The recent inclusion of Malta as one of the countries forming part of the Economic Monetary Union (EMU) and the adoption of the Euro, introduced both challenges and opportunities for debt management. From 1 st January 2008, Malta has handed over monetary policy to the European Central Bank (ECB). Besides, one must not underestimate the fact that Malta has to adhere to the Maastricht Treaty regulations. The budget deficit should not exceed 3% of the gross domestic product (GDP), thus restricting fiscal policy and the debt/GDP ratio should not exceed the 60% mark. The dissertation focuses on the measures being taken by the local authorities in order to achieve the targets stated in the Maastricht Treaty. Attention will also be given to the international macro economic scenario which undoubtedly will have an effect on the local economic performance and subsequently on the debt/GDP ratio.