NATIONAL DEBT SPIRAL: A TICKING TIME BOMB FOR MALTA
by Reader
Malta’s national debt is spiralling out of control, ballooning at an alarming rate of approximately one billion euros per year. One billion euros is equivalent to 1,000,000,000 Euros, or about 3,000 Euros per citizen. In a family of four people, it’s about 12,000 Euros per year. According to economic estimates in the chart by Hamburg-based Statista.com website, Malta’s national debt has entered a state of exponential growth. The Maltese Government is fast losing control as the creditors come knocking. The situation is rapidly worsening.
Far from devising a plan to pay off this crippling debt, the government may have to let it fester for election purposes, burdening future generations with an ever-growing financial albatross. Instead of fiscal restraint, the Government is resorting to a reckless strategy: issuing more government bonds to cover the crippling interest payments that are now biting deeply into the Treasury’s coffers. This is not governance. It is a Ponzi scheme dressed up as policy, and it threatens to drag Malta into a financial abyss reminiscent of Greece’s catastrophic collapse.
The Labour government’s approach is as simple as it is unsustainable: having run out of money, it turns to the Maltese people, pleading for loans through bond issuances to keep the state afloat. These bonds, however, come with a grim reality; there is no realistic prospect of repayment. The government is effectively asking citizens to pour their hard-earned savings into a bottomless pit. This mirrors the Nationalist Party’s (PN) own financial misadventures, where it enticed supporters with lucrative rates to fund party needs, only to leave lenders high and dry. The difference? The PN’s failures hurt its own backers. Labour’s reckless borrowing, conducted in the name of the nation, risks impoverishing the entire country.
For decades, Malta’s national debt has been on an unrelenting upward trajectory, a burden that has grown through the lifetimes of many citizens. Yet, Labour’s addiction to borrowing shows no signs of abating. The government’s bonds, touted as safe investments, are increasingly deserving of junk status. Lenders, seduced by promises of returns, are defying gravity, believing their euros will somehow multiply when history suggests they’ll be left with peanuts. It’s one thing to love an addict; it’s another to enable their addiction. Labour is Malta’s greatest addict, hooked on debt to sustain its profligate spending.
If the PN were to admit bankruptcy, only its loyalists would bear the cost. But when Labour’s house of cards collapses — and collapse it will — the entire nation will suffer. The Greek debt crisis serves as a stark warning: a government that borrows beyond its means can bring a country to its knees. Malta is not immune to such a fate.
Is this ‘reader’ a new pneeeeee spokesman? The truth is there is so much money in peoples pockets that this blabbing about is regarded simply as a donky’s bray.
Mr Stivala, You don’t pay billions with the cash in people’s pockets.
Yet apart dal-bziq kollu fil-vojt, Maslta’s national dept to-GDP is currently at 47.4%, this while the EU Marstrich treaty sets the limit of 60% of GDP.
Debt to GDP ratio theory is flawed. It forces governments to increase GDP in an artificial manner to keep ratio low. In the end debt will still catch up with you and at some point a default is inevitable.
Can Reader explain how the eu still approves the maltese government budgets and international credit agencies give top ratings to Malta’s economy?
Could be that ”JESS” also believes that the EU Aprovals as well as the interbational credit agencies top ratings are also FLAWED.
The ratings agencies don’t take into consideration the pain that is levied on the people once the debt has to be paid. The banks may take over all your possessions and sell them by auction. The proceeds make up for your debts. Technically you’re solvent but without your car, garage and wardrobe and poor as a church mouse.
The EU repeatedly approved Greece’s budget before Greece tanked. Even the banks approved and then they scrambled like madmen and left the Greeks as paupers in the streets.
It seems that this writer doesn’t know that Malta has nearly a trillion euros in local and foreign investments. I billion is equal to 1,000,000,000 euros 1 Trillion is equal to 1,000,000,000,000. The country has enough money for any rainy day.
Sur Schembri, then why is the government borrowing further? Why doesn’t it open the “trillion dollar” tap to pay its debts? This is no different than you owning your own apartment which may have a market value of x euros. But if you sink further in debt, you can’t sell your apartment to pay off your debt. For if you do, where will you sleep at night? A foreign investment in Malta may be a large factory. But it can’t be sold to pay off the national debt for various reasons such as (i) it’s owned by foreign shareholders who don’t give a darn about the Maltese debt, and (ii) selling off its premises would put workers on the dole, reducing the GDP in the process.
Ma tarax li mhux ser jaghmel kif qieghed tghid int. Mela ghandu l-investimenti qeghdin ituk b’tant imghax, imbaghad jibda’ jiekol minnhom, biex jonqoslu l-imghax. Hekk bli ghandu jista’ jiddejjen, u jhallas l-imghax tad-dejn li qieghed jaghmel b’rata nqas. Trid tkun cuc biex toqtol il-wizza li qieghda ttik il-bajd tad-deheb!
“Bajd tad-deheb?” Minn hu midjun il-biljuni m’ghandux fuq hiex jahlef. Ghalhekk johrog jittallab mal-poplu ghal iktar karita. Il-Prim fir-real estate jinvesti u mhux fil-bonds. Ix-xih jaf x’inhu jaghmel.
In my first post I asked if this article writer is the newest PNEEEEEE spoksperson for finance, this as when one checks and finds that the government is operating well witten the international excepted finance operating levels, it is clear that the scope of the writer is to unecessary alarm the people. Dirty tactics used by an oppostion that is virtually toast.
The author criticises both parties for their bonds. I find him credible and nor a shill for any of the parties. May he continue to wave the red flag (no pun intended) for what awaits the bond holders.