Portugal no longer in macroeconomic imbalance, European Commission
The country had been under the alert mechanism of the European Semester since 2014.
The European Commission has removed Portugal from the list of member states with macroeconomic imbalances that are under the surveillance of the European Semester alert mechanism.
According to the Commission, “vulnerabilities have decreased globally” and no longer justify permanent monitoring or the prescription of fiscal policy “remedies” to correct the trajectory of public accounts.
“Portugal no longer has imbalances. Risks to fiscal sustainability will be analysed within the framework of the reformed budgetary rules,” says the European Commission, in the report on the European Semester Spring Package that was released on Wednesday, June 19, in Brussels.
“We congratulate Portugal on its impressive performance in addressing its macroeconomic imbalances,” said the European Commission's executive vice-president, Valdis Dombrovskis.
“The decision is linked to the performance of budgetary policy, which has resulted in a surplus that is rare, and an accelerated decline in public debt, which has fallen below 100% of GDP,” he explained.
In addition to Portugal, Spain and France have also left the list of member states where the existence of macroeconomic imbalances jeopardised the stability of fiscal policy - because of the public accounts deficit, the level of debt, the trade balance, productivity or the housing market, among other factors.
Germany, Cyprus, Slovakia, Greece, Hungary, Italy, the Netherlands, Romania and Sweden will continue to be assessed under the alert mechanism.
After the return of the quantitative rules on budgetary discipline and the entry into force of the reformed version of the Stability and Growth Pact, the Commission limited itself to making qualitative recommendations to member states in the Spring Package, postponing until the autumn its prescriptions for the budgetary adjustment of countries that fail to meet the 3% deficit and 60% debt targets.
By then, the member states will have closed their medium-term structural plans, in which they define the trajectories of their budgetary policies: the capitals will receive the Commission's technical reference proposal this Friday (the document will not be public), which will have to be returned, after negotiation with Brussels, by 20 September.
The Commission also wants to wait until the 2025 budget proposals have been submitted before giving its opinion.
However, this Wednesday, the Commission already announced that it will request the opening of excessive deficit procedures against seven member states that have violated the treaties' rules on budgetary discipline and exceeded the limit of 3% of GDP by 2023: Belgium, France, Italy, Hungary, Malta, Poland and Slovakia.