Brussels, 07/11/2014 (Agence Europe) - Eurogroup and the European Commission will enter a constructive debate with Portugal to align views on Portugal's budget figures.
“I am still very confident about the Portuguese government and the work they are doing,' said the head of Eurogroup, Jeroen Dijsselbloem, on Thursday 6 November. Welcoming the excellent work of the Portuguese government, EU Economic and Financial Affairs Commissioner Pierre Moscovici recognised that there was a clear gap between the European Commission's and the Portuguese government's Portuguese deficit forecasts.
In its Autumn Economic Forecasts, the Commission suggests that the Portuguese deficit will reach 4.9% of GDP in 2014, unchanged on 2013, and 3.3% in 2015. But the Portuguese government still aims to reduce the deficit to 2.7% of GDP in 2015. Moscovici said there would be sustained, constructive dialogue on the deficit question to see what decisions needed to be taken. Visibly annoyed, Dijsselbloem refused to comment on the statement published on Wednesday by the European Commission and the European Central Bank on the first monitoring mission since Portugal exited its financial bailout in June 2014. In the statement, the two European institutions say: “Economic and financial conditions in Portugal have generally improved since the end of the EU/IMF-supported programme in June. Sovereign yields remain low, in line with developments elsewhere in the euro area and normal market-financing is being gradually restored. Nevertheless, economic recovery is constrained by high levels of debt in the public and private sector (…) The mission expressed concern that the pace of structural reform appears to have diminished considerably since the end of the programme, in some cases reversing past achievements. Notably, while it remains to be seen whether recent policy measures relating to collective wage bargaining could on balance contribute to a better alignment of wages to productivity developments, the decision to increase the minimum wage could make the transition into employment for the most vulnerable even more difficult.” (MB)