Finance Minister Fernando Medina did not travel to Brussels, where he was due to participate in the Eurogroup meeting this Wednesday. The outgoing government of António Costa will be represented at the level of the Minister of Foreign Affairs.
At a time when the future of the state budget proposal is uncertain, Fernando Medina will be replaced at the meeting “by the Secretary of State for Finance, João Nuno Mendes”, DN heard.
At the last meeting of the Eurogroup in which he participated, on 16 and 17 October, Fernando Medina welcomed the approval, by the European Union Finance Ministers, of the “reprogramming of the Portuguese PRR funds”, believing that it decision “leaves the country better prepared”. to achieve the 2024 target of “more investments on the ground”. Something that is not guaranteed now
This Wednesday’s meeting will discuss the European Union’s new rules for economic governance, which should replace the current provisions of the Stability and Growth Pact, which have been suspended since 2020, following Brussels’ decision to suspend the general escape clause to activate when the Covid-19 crisis broke out. crisis has hit the economy.
However, a decision on future rules is not expected before the December Ecofin meeting as there is no consensus among European governments. For example, there is still no agreement on debt reduction targets or deficit limits, nor on the criteria for triggering the excessive deficit procedure, European sources heard in Brussels said by DN.
In April, Brussels presented a package of economic governance reforms that will give member states “more autonomy” in decisions about adjusting their economies. However, Berlin has been a strong opponent and wants more commitment from the states with the highest debts on the path of debt reduction.
Under Brussels’ proposal, Member States would be given a more autonomous role in the decisions to be taken to achieve the objectives.
“Member States will design and present plans setting out their budgetary targets, measures to address macroeconomic imbalances and priority reforms and investments over a period of at least four years,” the proposal specifies, indicating that “these plans will be the Commission will be assessed and approved by the Council on the basis of common EU criteria”.
The European Commission has proposed creating a framework of ‘simpler rules’ to deal with budget differences between all member states. According to the proposal, Brussels would issue a specific ‘technical path’ for each country, in the case of member states ‘with a government deficit of more than 3% of GDP or a public debt of more than 60% of GDP. “that debt is put on a “downward trajectory or remains at prudent levels” while at the same time “maintaining or reducing the medium-term deficit and keeping it below 3% of GDP.”
In cases where Member States have a general government deficit of less than 3% of GDP and a public debt of less than 60% of GDP, “the Commission will provide technical information (…) to ensure that the general government deficit remains below the reference level “. value of 3% of GDP, also in the medium term”.
Brussels distinguishes between “technical pathways and technical information” and adds that these “will guide Member States in projecting multi-annual spending targets”.
Portugal favors a countercyclical component, with greater efforts to reduce debt in periods of GDP growth, and slower reduction in periods of economic slowdown.
The new rules are expected to be approved by Parliament and the Council by the end of the year, to enter into force in early 2024, when the so-called general escape clause that suspended budget discipline is lifted after the Covid-19 crisis.
Source: DN
