The European Commission considers that the draft General State Budget for 2024 presented by the Portuguese Government “is not fully aligned” with the specific country recommendations. The measures to alleviate the electricity bill for next year constitute “the main reason” for criticism from Brussels. This Tuesday, the Commission presents its evaluation of the Member States’ budget plans for 2024.
According to a European Commission source, the conclusion that the budget project does not “completely” comply with Brussels’ guidelines “arises from the fact that energy support measures will continue in 2024.”
The Commission foresees, “in the coming years”, a trend towards a gradual decrease in energy support measures, which should reflect a more restricted budgetary approach. However, Brussels considers that the measures “remain significant” and some of the “savings derived from the energy measures are not being fully used for budget consolidation purposes,” said the senior official mentioned above.
“The estimate we are working with is that in 2023 these [medidas] would represent 1.3% of GDP, falling to 0.7% of GDP with the recommendation”, states the same source, highlighting that “the commitment to eliminate or gradually reduce energy support measures” does not follow the “expected” line “, in 2024.
Along with Portugal, there are other Member States that are subject to the same reparation by the European Commission. The list of “six countries” includes “Croatia, Germany, France, Luxembourg, Malta and Portugal.”
The same source highlights that “in terms of budget balance, the situation is positive with a surplus of 0.8% of GDP this year, and a situation of budget balance in the coming years”, in addition to the fact that the debt continues “at a downward trend”. trajectory”.
Political crisis
Given the current situation of political crisis, with elections scheduled for March 10, 2024, the European Commission expert recognizes that a new evaluation of the “budgetary measures” will be necessary when a new Government takes office.
In the presentation of the autumn macroeconomic bulletin, the Commissioner for Economy, Paulo Gentiloni, highlighted the intention of the national authorities to complete the approval of the State budget, “despite the crisis that Portugal is going through.”
“The authorities decided to proceed with the approval of the budget before the elections and I do not believe that this situation will affect investments in this country,” stressed the commissioner, on the sidelines of the presentation of the autumn macroeconomic bulletin.
“Obviously, we will have to address the budgetary situation after the elections and if a new government comes in, as soon as budgetary measures are adopted,” stressed this Tuesday an expert from the European Commission, familiar with the subject, heard by TSF. .
Prudence
The recommendation is addressed to “all Member States”, which should “eliminate or gradually reduce energy support measures as quickly as possible, in 2023 and 2024”, highlighted a senior official, highlighting that “the savings related to the reduction of energy support measures “should be oriented” towards budgetary consolidation purposes.
Despite not being “fully aligned” with the recommendation in the part relating to energy support measures, Portugal should achieve the medium-term budget objective in 2024, “maintain prudent budgetary policies” and “achieve the objectives” of the primary balance net. , being at this level, “is considered in accordance” with the recommendation of the European Commission.
Source: TSF
