Assessing the Impact of the European Fiscal Compact on Eurozone Mediterranean States (With A Focus on Malta)

Philip von Brockdorff, Joseph Falzon


The paper assesses the impact of the European Fiscal Compact on Eurozone Mediterranean States with a focus on Malta by estimating deviations between potential and actual GDP for the Maltese economy, comparing the cyclical components of public revenues and expenditure, and estimating the cyclically adjusted deficit in excess of the requirement of 0.5 per cent structural deficit. A discussion on the structural nature of Malta’s budget deficit ensues. Finally, by comparing public debt ratios of the selected States, the paper examines the policy implications of reducing the budget deficit for the Maltese Islands.

DOI: 10.5901/mjss.2014.v5n14p11

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This work is licensed under Creative Commons Attribution 3.0 License.

Mediterranean Journal of Social Sciences ISSN 2039-9340(Print) ISSN 2039-2117(Online)

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