The European Commission is of the opinion that Portugal's revised draft budget plan for the year 2020 shows a “risk of significant deviation” from the Stability and Growth Pact, in a specific opinion delivered on Wednesday 15 January.
In particular, the European institution is of the opinion that structural budgetary efforts will deviate “significantly” from the medium-term objective set for both 2019 and 2020. Commission calculations point to a deviation of between 0.5% and 1.3% of GDP, while an effort equivalent to 0.6% of GDP is required for euro area countries whose government deficit is below the 3% of GDP threshold.
“The Commission's opinion, which is based on forecasts, points to a slightly larger structural deficit. The Commission invites the Portuguese authorities to take the necessary measures”, said Marta Wieczorek, on behalf of the European institution.
The revised draft budget plan foresees a general government deficit in nominal terms of 0.1% of GDP in 2020 and a budget surplus of 0.2% of GDP in 2020, a first since the return to democracy in 1974. Between 2019 and 2020, the structural deficit would be reduced from 0.5% to 0.3% of GDP.
The Portuguese draft budget plan for 2020 will be discussed at the Eurogroup meeting on Monday 20 January.
See Commission Opinion: http://bit.ly/30pgI0D (Original version in French by Mathieu Bion)