Three judgments, seven measures on state accounts for this year. Today there will be new decision of 13 judges of the Constitutional Court and in sight are two more steps.
A new contribution on pensions, this time of finality (Contribution to Sustainability) to apply from 2015 permits a cash inflow of 360 million euros annually. The other measure in the hand of the judges is the replacement of wage cuts for civil servants in force in 2013 (reductions between 3.5% and 10% for salaries above 1500 euros gross) progressively restored within a maximum period of four years. The purpose of the executive is to apply them as early as September. Vale to the public coffers monthly around EUR 34 million.
With the decision in relation to these two measures, the Government will keep almost all doubt taken in relation to the budgetary impact of the decisions of the Constitutional Court . And decisõessobre can take the possible need for new measures, which decided to postpone in May, when the Constitutional Court flunked three measures, including wage cuts for civil servants. The executive then said he had to know what you can count on the side of TC, especially with regard to cuts in wages and pensions. This Thursday will know.
For the current year, which will now be decisive is the decision of the TC relative to the salaries of civil servants. If replacement, starting in September, an equivalent to what was in effect pass the court, the government cut be able to offset by EUR 150 million losses recorded with lead May. You can also reassured by the recent approval of the new version of the Extraordinary Solidarity Contribution (CES), get in a more comfortable position in which the safety cushion provided in the initial budget and the positive effect of a higher than expected tax revenues will be sufficient to achieve the objectives.
The accounts for 2014 will depend, however, other factors such as the impact of Treasury financing the public transport companies, the practical effect of methodological changes made by European statistical authorities in the calculation of the deficit and even the decision of the TC in relation to the increased contribution to ADSE, the only measure that will be a judge. And the numbers for the deficit will still have to be evaluated in the light of economic developments and the effect this may have on the pace of budget execution in recent months.
Out of accounts is, in principle, any negative impact on the deficit of 3900 million euros because of the solution found for BES. Statistical authorities have not yet decided how to account for the operation, but the Government has now clarified that agreed with the European Commission that a slip deficit because this operation will not be taken into account in assessments to the Portuguese public accounts.
If the court flunk this new wage cut, making it impossible to adopt a similar measure by the end of the year, the fiscal space is reduced by approximately EUR 150 million, and could force the Government to remedies for quick effect.
The fourth decision OE
The State Budget for 2014 has given some headaches to the Executive. As early as last December, the convergence of pensions in the public and private sectors after a request for preventive control of the President earned unanimous lead the Court, with an impact on public coffers 388 million euros.
Most invoice years to come, however, at May. The range of five measures, only survived the suspension of pension supplements in loss-making public enterprises, budgeted at around € 25 million. Wage cuts in the public sector, rates of 6% and 5%, respectively, of unemployment and illness, and the cut in the survivor’s pensions would force the government to explore alternatives to a budgetary impact of over EUR 1 200 million .
The last judgment this year was known two weeks ago and scarce allowed the Government breath of relief. Green light for CES and for 50% of the contribution of employers to ADSE be transferred to the state treasury.
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