Finance Minister Fernando Medina said on Friday that the new fiscal rules being discussed in the European Union should not be a “source of problems” that exacerbate the crisis in negative moments.
“Learning from the lessons of the past, that fiscal rules are becoming more and more anti-cyclical, that the rules themselves, as happened in the past, are not a source of problems from a budgetary and financial management point of view”, said Medina at a joint press conference in Lisbon with European Commissioner for Economy, Paolo Gentiloni.
For Medina, “By no means [essa proposta] jeopardizes the growth strategy of the Portuguese economy”, stating that the strongest point of the European Commission’s proposal is precisely “to try to prevent the rules from being pro-cyclical, that in a period of crisis or low growth the rules enforce fiscal consolidation efforts that will only exacerbate the situation,” but stated that work will continue.
Medina said again, as he had said at an informal Eurogroup meeting in late April, that even with the resumption of European Union (EU) rules on debt and deficits in 2024, with or without a more flexible path of reduction, Portugal will have no problem complying.
In April, the European Commission proposed “risk-based” fiscal rules when they resume in 2024, suggesting a “technical trajectory” for indebted EU countries, such as Portugal, that would give them more time to recover deficit and debt. insist.
Greater differentiation is foreseen between EU countries, taking into account their degree of difficulty, with Member States with a deficit of more than 3% of gross domestic product (GDP) or a government debt of more than 60% of GDP having a “technical trajectory” defined by the European Commission.
The Stability and Growth Pact (PEC), which has been in force for 30 years, requires Member States’ public debt to not exceed 60% of GDP and imposes a deficit below the 3% threshold, but in the context of the pandemic The clause was activated in March 2020 to allow member states to respond to the Covid-19 crisis by temporarily suspending such requirements.
In the context of geopolitical tensions and market disruptions caused by the war in Ukraine, the temporary suspension of the SGP rules was maintained for another year, until the end of 2023, and the fiscal rules are now expected to be lifted in 2024.
Source: DN
