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Portugal's budgetary plan at risk of non-compliance with EU rules: Eurogroup

Xinhua, February 12, 2016 Adjust font size:

The Eurogroup following Thursday's meeting said Portugal's budgetary plan for 2016 is at risk of non-compliance with the Stability and Growth Pact (SGP), echoing opinion adopted by the European Commission last week.

The Eurogroup issued a statement agreeing with the Commission's findings and welcoming the Portuguese government's commitment to prepare as of now additional measures to be implemented when needed to ensure the compliance of its 2016 budget with the SGP rules.

The Eurogroup, or the informal meeting of finance ministers of the euro area countries, on Thursday discussed the Draft Budgetary Plan of Portugal, prepared by the new, left-wing government in Portugal and submitted on Jan. 22 to the European Commission.

Portugal has been in the corrective arm of the SGP since December 2009 and was asked to correct its excessive deficit by 2015, i.e. to bring the deficit to below 3 percent of GDP by 2015.

For 2016, the Council of the European Union recommended that Portugal make a fiscal adjustment of 0.6 percent of GDP towards the medium-term objective.

In its opinion adopted on the Portugal budgetary plan on Feb. 5, the European Commission said taking into account Portugal's budgetary plan and further structural consolidation measures announced by Portugal on Feb. 5, the structural effort planned by the Portuguese authorities for 2016 is estimated to be only between 0.1 percent and 0.2 percent of GDP.

The Commission had urged the Portuguese authorities to take the necessary measures within the national budgetary process to ensure that the 2016 budget will be compliant with the SGP. Endit