World Economy

EC Critical of Portugal Draft Budget

EC Critical of Portugal Draft BudgetEC Critical of Portugal Draft Budget

Portugal’s 2016 draft budgetary plan is at risk of non-compliance with the provisions of the bloc’s Stability and Growth Pact, according to the European Commission.

In its opinion adopted on February 5, the EC called on the Portuguese authorities to take the necessary measures within the national budgetary process to ensure that the new budget will be compliant with the Stability and Growth Pact, NewEurope reported.

Vice-President Valdis Dombrovskis, responsible for the ‘Euro and Social Dialogue’, said: “Following intense technical and political contacts, the commission did not have to request a revised draft budgetary plan from the Portuguese authorities.

“Nevertheless, the government’s plans are at risk of non-compliance with the rules of the Stability and Growth Pact. The Portuguese government is invited to take the necessary steps to ensure that the 2016 budget is compliant. In spring, the commission will reassess Portugal’s compliance with its obligations under the Stability and Growth Pact, including under the Excessive Deficit Procedure.”

In turn, European Commissioner for Economic and Financial Affairs, Taxation and Customs, Pierre Moscovici, said: “This is a good outcome for all concerned: Portugal, the commission and the eurozone. Without having had to request a revised Draft Budgetary Plan, a constructive dialogue has led to additional measures worth up to €845 million ($943 million), which will help safeguard the soundness of Portugal’s public finances.

“The reassuring message to investors today is: the EU’s fiscal framework is robust and the commission welcomes Portugal’s reaffirmed commitment to it. At the same time, the risk of non-compliance remains and we will continue to monitor developments in the coming months as part of the ongoing Excessive Deficit Procedure.”