Brussels, 21/02/2014 (Agence Europe) - In reports published on 18 and 20 February respectively by the European Commission and International Monetary Fund on implementation of the Portuguese structural adjustment programme, the two bodies welcome the progress noted by the troika's tenth monitoring mission in the country (see EUROPE 10986), but express concern about the court cases over achievement of the objectives.
The Portuguese government is awaiting the outcome of a case at the country's constitutional court on key measures from the country's 2014 budget. In the past, the court has ruled that various measures taken by the government were unlawful. The IMF comments: “Risks to attaining the objectives of the program remain high. Beginning in mid-2012, legal challenges to fiscal measures have become recurrent, and - with key elements of the 2014 budget law now submitted to the Constitutional Court for review - these challenges have intensified in recent months. This significantly complicates the authorities' efforts to rebalance the fiscal consolidation effort toward expenditure-based measures, undermines the quality of the resulting fiscal adjustment, and introduces high policy uncertainty, with an attendant negative impact on output and employment. In addition, with its high debt ratios and large refinancing needs, Portugal remains susceptible to abrupt changes in market sentiment”.
Portuguese Finance Minister Maria Luis Albuquerque said on Thursday: “More than responding to the conditions imposed by international partners, it's a matter of guaranteeing that this was the last time that we had to submit a request for a bailout”. (EL/transl.fl)