Portugal: EC to announce decision on deficit procedure on Monday

Page created: Friday, 19 May 2017 14:29 GMT

European Commission  Excessive Deficit Procedure

Brussels, May 19 (Lusa) – The European Commission (EC) is due on Monday to announce its decision whether Portugal will leave the Excessive Deficit Procedure (EDP), with the Portuguese authorities believing Brussels will bring an end to the procedure that has been in place since 2009.

The Commission’s decision will be announced at the presentation of the European Spring Semester Package, through which Brussels will issues specific recommendations to each country after analysing national programmes for stability and reforms presented by each member state in April, and will implement measures as part of the Stability and Growth Pact.

The European Commission (EC) said 11 May it estimates that Portugal’s budget deficit will keep falling to 1.8% this year and 1.6% next year, numbers that are higher than government forecasts and that open the way to end the Excessive Deficit Procedure.

In its Spring forecasts the EC stated that “after being the equivalent of 2% of Gross Domestic Product (GDP) in 2016, the budget deficit is expected to remain below 2% on the projection horizon”.

The forecasts also show an improvement compared with the Winter forecasts, when Brussels estimated that the deficit would be 2% in 2017 and 2.2% in 2018, though the EC is still concerned with the impacts of the Caixa Geral de Depósitos (CGD) capitalisation operation.

As regards government debt, after having reached 130.5% of GDP in 2016, Brussels estimates a reduction to 128.5% of GDP this year and to 126.2% next year, meaning its forecasts are slightly less than those from the government, which are 127.9% and 124.2%, respectively.