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Brussels issues Portugal budget warning

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The European Commission recommends that Portugal present the medium-term budgetary structural plan in a “timely manner” and limit the growth of net expenditure in 2025 to a rate consistent with placing public debt on a downward path in the medium term.

The warnings are part of the country-specific recommendations, released by the community executive, associated with the assessment of macroeconomic imbalances in the Member States. For 2024 and 2025, Brussels recommends that Portugal present “the medium-term budgetary-structural plan in good time”.

For the European Commission, it is essential that, in line with the requirements of the reformed Stability and Growth Pact, the country limits “the growth of net expenditure in 2025 to a rate consistent with placing public government debt on a plausibly downward trajectory to medium term and respecting the 3% Treaty reference value on the GDP deficit”.

At issue is the new framework of European rules, in which each Member State will have to present a medium-term structural budgetary plan, with a period of four or five years, which includes its commitments in budgetary matters, reforms, and investment.

The plan should include, among other indicators, the forecast of the country’s net primary expenditure, which will have an important weight in Brussels’ assessment, as it will make it possible to assess whether the country is in line with the objective of reducing public debt and sustainability of public Accounts.

The European Commission also urges Portugal to reduce emergency energy support measures before the winter of 2024/2025, as well as improve the effectiveness of the tax system, namely by reinforcing the efficiency of its administration and reducing the associated administrative burdens.

Taking measures to guarantee the medium-term budgetary sustainability of the pension system is another recommendation for Portugal, as well as strengthening the administrative management capacity of European funds, accelerating investments, and maintaining the momentum for implementing reforms.

In this sense, the country must respond “to delays” in order to allow the effective and continuous implementation of the Recovery and Resilience Plan (PRR), including REPower EU, ensuring reforms and investments until August 2026.

Read More: Brussels issues Portugal budget warning

2024-06-22 04:46:03

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