Brussels, 05/02/2016 (Agence Europe) - On Friday 5 February, the European Commission did not require Portugal to submit a new draft budget for 2016, but said that the present draft risked not complying with the corrective arm of the Stability and Growth Pact (EUROPE 11483).
“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”, said Euro and Social Dialogue Commissioner Valdis Dombrovskis, pointing out that the Portuguese government was urged to take the measures needed to ensure its 2016 budget is compliant. He mentioned the high level of public debt.
Eurogroup will meet on Thursday 11 February and is expected to discuss the Commission's opinion. The Commission will assess Portuguese public finances in the light of the updated figures provided by the EU's statistical office, Eurostat, and the Stability and Convergence Programmes that Lisbon will notify in April under the European Semester process.
Economic and Monetary Affairs Commissioner Pierre Moscovici said the good decision was simply a stage because plenty of hard work remained to be done. He said that in a week, the Portuguese authorities had submitted three packages of measures to the Commission to adjust the initially notified draft budget, whose structural impact, he said, would be to the order of €845 million (see EUROPE 11483). Taking account of these measures in its opinion, the Commission says that the deviation from the required medium-term structural budget effort was between 0.1% and 0.2% of GDP, and therefore below the required 0.5% of GDP.
Rejecting the budget would not have corrected the deviation and would have weakened the country, said Moscovici, highlighting the credibility of the Stability Pact rules. (Original version in French by Mathieu Bion)