Brussels approves Portuguese budget project but recommends caution

Brussels approves Portuguese budget project but recommends caution

The European Commission considered today that the draft 2021 State Budget for Portugal “Is globally in compliance” with the Council's recommendations, but advised caution in view of the high level of deficit and public debt.

In issuing its opinions today on the budgetary plans of the eurozone member states for the coming year, drawn up in an extraordinary context in the face of the economic crisis caused by the covid-19 pandemic, Brussels points out that “Most of the measures foreseen in the draft budget plan for Portugal are supporting economic activity in a scenario of great uncertainty” and are mainly of a temporary nature.

In its opinion today, the Commission warns that, “Given the level of the Portuguese public debt and the major sustainability challenges in the medium term” verified even before the covid-19 outbreak, “It is important for Portugal to ensure that, when taking budget support measures, it preserves fiscal sustainability in the medium term”. The same recommendation is given to France, Spain, Italy, Belgium and Greece.

The European Commission therefore invites Portugal to “To regularly review the use, effectiveness and suitability of support measures and to be ready to adapt them as necessary in the light of changing circumstances”, a recommendation that is also addressed to all Member States.

This year, this second stage of the so-called "Autumn Pack" of the European economic and budgetary policy coordination semester is adapted to the covid-19 crisis, which led to a suspension of the rules of the Stability and Growth Pact, so the Commission's opinions take into account the “Qualitative nature” economic recommendations to Member States issued by the Council last July and focus mainly on assessing "Whether the budget support measures planned for 2021 are temporary or not".

In order for Member States to support their economies in the face of the crisis generated by the covid-19, which plunged Europe into the biggest contraction since World War II, the European Commission proposed an unprecedented suspension of the rules of budgetary discipline, through an activation the general safeguard clause, approved by EU finance ministers, and which will remain in force at least until the end of 2021.

The Portuguese State Budget proposal for 2021 was approved in general on October 28 last in the Assembly of the Republic, with only the favorable votes of the PS and the abstentions of the PCP, PAN, PEV and of the deputies Joacine Katar Moreira and Cristina Rodrigues.

The final global budget vote is scheduled for November 26.


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