Brussels, 20/10/2003 (Agence Europe) - According to a press statement published on Friday by Commissioner Pedro Solbes, the European Commission noted with satisfaction that Portugal is committed to respecting, "common budgetary framework" and continues its efforts to eliminated the excessive deficit affecting the economy of the country. Budgetary developments in Portugal in 2003 have been negatively influenced by the worse than expected slow down. Portugal will have a negative growth rate in 2003. It nevertheless appears that the general government deficit can be kept at below 3%, albeit with recourse to a large amount of one-off operations. Some of these operations have still to be clarified and their statistical treatment has to be formally cleared by Eurostat. In order to reduce the deficit, the Portuguese Finance Minister, Manuela Ferreira Leite, will appeal for extraordinary use of finance. As well as the sale of national heritage for EUR 1 bn, the government will also for the first time apply financial engineering by raising finance by selling securities to third parties based on the recovery of EUR 500 million in tax arrears and national insurance contributions.
As for 2004, the Commission notes with satisfaction of the planned deficit figures of 2.8% of GDP. "This objective appears to be based on prima-facie realistic growth assumptions". However, uncertainties remain, including reliance on large one-off operations amounting to 1.1% of GDP. "In our upcoming Autumn forecast we will take into consideration as usual the intended government operations (one-offs and other) to the extent that they are sufficiently well specified at that time", adds Mr Solbes.