During the voting, MP Franco Debono, a member of the ruling Nationalist Party and a fierce critic of the government, voted against the budget and robbed the government of its volatile one-seat majority.
The small Mediterranean country is one of the few members of the eurozone whose economies grew in 2012. Malta's economy grew by 1.9 percent in real terms in the third quarter of the year.
The two main political parties competing in the elections are the Nationalist Party, who won the 2008 elections by a small margin and the Labour Party, who was forced into opposition.
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