Even without having analyzed in detail the risks which at this time threaten Portugal, the european institutions have shown some reservations in relation to the situation of the Portuguese economy, concluding by the need for Lisbon to resume the pursuit of structural reforms.
at the End of the Eurogroup meeting which took place this Thursday, January 26, in Brussels, the leader of this institution, the Dutch Jeroen Dijsselbloem, said that “we have taken note of the fact that there is some volatility” in the markets in Portugal, which “stresses the need to accelerate the reform agenda and strengthen the banks”.
In the perspective of Dijsselbloem, the rise of the interest of the Portuguese public debt observed in recent weeks, that within 10 years, even today, over 4%, to a maximum of February last year, “is a sign of the markets” that stresses the importance of the Lisbon tackle the underlying issues.
These issues are “the high public debt and the conditions of the markets”, issues that, despite the progress reached in front of the budget”, require the Portuguese Government to the reiterate of commitment with a “reformist agenda”. Even without saying it directly, it was understood that the Dutch politician considers negative policy reversals carried out by the current Executive.
Dijsselbloem admitted that “we do not discuss in detail the markets’ confidence in Portugal,” noting, however, that “we are analyzing the situation”. In this meeting of the Eurogroup, among other topics, were presented the conclusions of the evaluations post-program made by the troika for Portugal and Ireland.
More optimistic, Pierre Moscovici, european commissioner for Economic Affairs, noted that the growth of the Portuguese economy “is more moderate” than that presented by Ireland, however, the French noted that, in general, the economic environment in Portugal “continues to improve”, exemplifying with the improvement unforeseen the economy in the third quarter of last year.
But it is “important to continue to pursue a fiscal strategy is prudent,” he cautioned Moscovici, pointing to the need “to reduce debt” and to confer robustness “of the current recovery” of the economy.
Also Klaus Regling,the leader of the European Stability Mechanism (ESM), mentioned for Portugal and Ireland, considering that there are “no risks” that these countries do not have the conditions to refund the money received under their bailouts. Already specifically about the eu’s Regling said that, “we must understand that the markets are nervous about the level of the debt, the financial sector and the competitiveness of the economy”.
however, the president of the ESM believes that if these issues are “faced” by the Portuguese Government, “the markets will react” in a positive way. Finally, Regling proved to be “comfortable” with the guarantees given by Centeno in relation to the resolution of these problems.