Brussels, 21/06/2006 (Agence Europe) - The European Commission believes that Portugal is on the right track to put an end to its excessive deficit no later than 2008, as recommended by the Council in September 2005, as long as it strictly executes the 2006 budget and continues to apply a rigorous strategy of budgetary cleansing in 2007 and the years thereafter. For the time being, the recommendation of new measures does not seem necessary.
In the communication adopted by the Council on Wednesday 21 June, the Commission takes the view that the action undertaken by Portugal reflects adequate progress in correcting the excessive deficit within the submitted deadlines. In particular, Portugal has (i) achieved its aims in terms of its deficit for 2005 (6% of GNI); (ii) adopted a global raft of corrective measures which, once they have fully produced their effects, should allow the structural adjustment required for this year to be operated; (iii) confirmed the objective of the deficit below 3% of GNI for 2008 and a structural adjustment curve in line with the recommendation of the Council; (iv) implemented expenditure reform and maintained its budgetary objectives despite less favourable GNI growth perspectives; (v) proposed to reduce public debt from 2008; and (vi) taken action to improve the statistics.
The Commission does not consider it necessary, for the time being, to adopt further measures within the framework of the procedure concerning excessive deficit. Furthermore, it stresses that significant uncertainty and risks still exist for the excessive deficit correction objective for 2008- the principal condition being that the budgetary results can only be achieved if all corrective measures announced are effectively implemented. It points out that if the planned measures do not bear fruit, other efforts must be deployed in order to achieve the budgetary objectives. The Commission will continue to pay close attention to the development of Portugal's budgetary situation, given the fragility of its public finances, amongst other things.
The communication of the Commission to the Council is available at the following address: http: //http://www.europa.eu.int/comm/economy_finance/about/activities/sgp/edp/edppt_en.htm