(VALLETTA) - Malta's government pledged to slash its budget deficit to achieve a balance by 2010 as the new eurozone member officially opened its parliament on Saturday following March elections.

President Eddie Fenech Adami also expressed concern over economic conditions worldwide.

"In these last few weeks, the crisis has deepened, and the indications are that matters will take a further turn for the worse. Yet the battle must go on," he said.

The government, elected on March 8th, has a one-seat majority in the now 69-member House of Representatives.

It set a goal of turning the deficit into a surplus by 2010 in part by cutting public spending.

Malta, which joined the eurozone at the start of the year and the EU in 2004, has reduced its budget deficit from 10 percent in 2004 to 1.6 percent of GDP in 2007.

The government is also planning tax reforms to create economic incentives, including lowering income taxes and abolishing departure taxes.

As pledged during the electoral campaign, Fenech Adami said "the government will focus on environmental concerns and issues, which have become matters of national importance.

"A decision has been taken to allocate to environment projects a significant part of the funds that Malta will receive from the European Union. At least 300 million euros (463 million dollars) in EU funds and other public monies will be allocated to this purpose".

Malta will work towards a 20 percent reduction in carbon dioxide emissions by 2020, and towards having 10 percent of its energy come from alternative sources.

Illegal immigration was also evoked. Hundreds of boat people arrive each year in the Mediterranean island mainly from Libya and north Africa.

"The government will continue with its commitment to the problem of illegal immigration, using an approach that strikes a balance between compassion for those who deserve help and a hard line taken with those who have no right of refuge," said Fenech Adami.

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