The European Commission believes that the 2024 draft budget presented by the Portuguese government is “not fully in line” with the country-specific recommendations. The measures to reduce electricity bills in the coming year are “the main reason” for the Brussels review.
According to a European Commission source, the conclusion that the budget project is not “fully” in line with Brussels guidelines “arises from the fact that energy support measures will continue in 2024.”
The Commission expects a trend towards a gradual reduction in energy support measures “in the coming years”, which should reflect a more cautious budgetary approach. However, Brussels believes that the measures “remain significant”, and that some of the “savings from energy measures are not fully utilized for fiscal consolidation purposes”, according to the senior official mentioned above.
“The estimate we are working with is that these will be in 2023 [medidas] would represent 1.3% of GDP, falling to 0.7% of GDP with the recommendation,” says the same source, emphasizing that “the commitment to abolish or gradually reduce energy support measures” does not “expected” line follows in 2024.
Besides Portugal, there are other Member States targeted by the same recovery from the European Commission. The list of “six countries” includes “Croatia, Germany, France, Luxembourg, Malta and Portugal”.
The same source emphasizes that “in terms of the budget balance, the situation is positive, with a surplus of 0.8% of GDP this year, and a balanced budget situation in the coming years”, in addition to the fact that the debt “remains at a downward trend”. procedure” .
Political crisis
Given the current situation of political crisis, with elections scheduled for March 10, 2024, the European Commission expert acknowledges that a new assessment of “fiscal measures” will be necessary when a new government takes office.
Presenting the autumn macroeconomic bulletin, Economy Commissioner Paulo Gentiloni had stressed the national authorities’ intention to complete the approval of the state budget, “despite the crisis unfolding in Portugal”.
“The authorities have decided to proceed with the adoption of the budget before the elections and I do not believe that this situation will have an impact on investments in this country,” the Commissioner emphasized on the sidelines of the presentation of the macro-economic economic bulletin.
“It is clear that we will have to address the budgetary situation after the elections and when a new government takes office and as soon as it adopts budgetary measures,” an expert from the European Commission, familiar with the subject, emphasized this Tuesday, heard by DN.
Caution
The recommendation is addressed to “all Member States,” which “should eliminate or gradually reduce energy support measures as soon as possible, in 2023 and 2024,” a senior official stressed, stressing that “the savings associated with the reduction of energy support measures “should be targeted “for fiscal consolidation purposes”.
Despite not being “fully aligned” with the recommendation in the section dealing with energy support measures, Portugal should achieve the medium-term budgetary target by 2024, “maintain a sensible fiscal policy” and “achieve the targets ” (net primary balance), at this level, “considered to be in line” with the European Commission recommendation.
Source: DN
