Under the rules of the Stability and Growth Pact, a major target is for member states’ budget to aim for balance, or at worst an annual deficit of less than 3 percent of GDP.

It is up to the individual governments to decide how to achieve this result.
The claim is made that governmental accounts are being prepared on the basis of accruals, according to Eurostat methodology.

The truth however is that most budgets are not worked out on an accruals basis, but on a cash basis..

From an accounting perspective, a euro spent on investment in a given year is given the same weighting as every euro spent on recurrent expenditures.
Yet it is clear that a euro spent on investment has a completely different economic significance to a euro spent on social transfers for instance, or payment of public salaries.

As a result, in complying with SGP rules, governments are finding it technically easier and politically more expedient to cut investment rather than trim recurrent outlays in order to manage their expenditures.
The European Commission in its Annual Growth Survey has more than once highlighted the problem.

We have been for some time now deploring the drop in public (and private) investment in Europe.

It may be an unintended consequence of the SGP rules, yet when applying them member states are actually being incentivated to cut back on investment.

The irony is that for the soon to be established Juncker fund, in order to get governments to participate in it, the European Commission is rightly proposing that expenditures contracted to make financial contributions to the Strategic Investment Fund will be excluded from consideration under SGP rules.

Surely the same logic should at least apply in the case of incremental public investment that national governments undertake in their own economies.

Maltese Version

Taħt ir-regoli tal-Patt ta’ Stabbiltà u Tkabbir Ewropew (PST), insibu l-għan ewlieni li l-baġits tal-istati membri jimmiraw għal bilanċ, jew minn tal-inqas, defiċit annwali ta’ mhux inqas minn 3 fil-mija tal-PDG.

Huwa f’idejn il-gvernijiet li jiddeċiedu kif għandu jinkiseb dan ir-riżultat.

Jintgqal li l-kontijiet tal-gvern qed jiġu ppreparati abbażi tal-“accruals” skond metodoloġija tal-Eurostat.

Madanakollu, l-verità hija li il-maġġorparti tal-baġits ma humiex maħduma abbażi ta’ “accruals” imma ta’ fondi kontanti.

Mill-perspettiva ta’ kif jinzammu l-kontijiet, in-nefqa ta’ ewro li ssir għall-investiment f’sena partikolari tiġi mogħtija l-istess piż bħal kull euro minfuq fuq spejjez rikorrenti.

Iżda huwa ċar li ewro minfuq fuq l-investiment għandu sinifikat ekonomiku kompletament differenti minn ewro li jintefaq għal, per eżempju, trasferimenti soċjali, jew għal ħlas tas-salarji pubbliċi.

Minħabba dan, biex jiġu rispettati r-regoli tal-PST, il-gvernijiet qed isibuha teknikament aktar faċli u politikament aktar konvenjenti li jaqtgħu l-investiment milli jnaqqsu l-ħruġ rikorrenti sabiex jikkontrollaw l-infiq tagħhom.

Il-Kummissjoni Ewropea, fl-Istħarriġ Annwali tagħha dwar it-Tkabbir Ekonomiku, tenfasizza din il-problema għal aktar minn darba.

Issa ilna mhux ħażin niddeploraw it-tnaqqis fl-investiment pubbliku (u privat) fl-Ewropa.

Jista’ jkun illi din hija konsegwenza li ma kinitx prevista meta tfasslu r-regoli tal-PST. Madanakollu, fil- verità, meta japplikaw dawn ir-regoli, l-istati membri qed jiġu mħajra biex inaqqsu mill-investiment.

L-ironija hija li sabiex il-gvernijiet jiġu mħajra jipparteċipaw fil-fond Juncker li daqt se jitwaqqaf, il-Kummissjoni Ewropea bir-raġun qed tipproponi li l-kontribuzzjonijiet mill-istati membri ma jingħaddux skond ir-regoli tal-PST.

Għandha tkun ħaġa ċara li l-istess loġika għandha għall-inqas tapplika fil-każ ta’ investiment pubbliku inkrementali li l-gvernijiet nazzjonali jagħmlu fl-ekonomiji tagħhom.