The stability and growth pact reforms and their implications for Malta

Abstract

This study will take the reader on a journey as from the establishment of the EMU documenting the convergence criteria which had been endorsed by the Stability and Growth Pact (SGP). What went wrong in the first five years of the SGP and what is the importance of fiscal discipline in particular within the context of the EU economic governance? The first chapter lays the footing for a thorough report of the new version of the SGP, followed by a review of the literature available debating the effectiveness of the said reforms. This background sets the path for a critical analysis of Malta's fiscal performance and the challenges it may face in light of the new requirements. The subsequent chapter examines Malta's institutional and procedural budgetary framework and key weaknesses resulting from the implications the reforms may have on the country. By way of conclusion the study brings together and links the outcomes of the different chapters in order to have analysed all the features of Malta's fiscal policy-making in the hope that it answers this study's research question: 'How will the Stability and Growth Pact reforms affect fiscal policy-making in Malta?'