Brussels notes that fiscal consolidation is to comply – Expresso

Brussels notes that fiscal consolidation is to comply – Expresso

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When, in early May, the Troika concluded the 12th and final mission of checking the implementation of the adjustment program, the corresponding final report never came to see daylight. This analysis was published on Tuesday in the form of an overall assessment of the implementation of the program between 2011 and 2014

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And if, unsurprisingly, the conclusion is that exercise of the last three years was “generally successful,” the idea that transpires is that once the Troika turned back, the problems started when the compliance level agreed commitments on fiscal consolidation

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The document prepared by the European Commission warns of a series of ” risks “to meet the goal of deficit planned for 2014 (4%) and 2015 (2.5%), some of which” have not materialized, “a reference to the decisions of the Constitutional Court (TC). What however is added to the debt problems of public transport companies level and the recent resolution of BES

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The government has tried to address some of these challenges in the second amending budget in September, Brussels but stresses that this exercise” does not include any measure of further consolidation. ” The end result is that the deficit for 2014 may reach 7.5% of GDP, according to the new European System of Accounts. Well above government estimates

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Given this evolution of events recorded in the brief period after Troika, The European Commission then labels the budgetary consolidation strategy as being of “inferior” compared to initial plans, since “less is based on permanent expenditure reductions and minimizes the necessary structural adjustment”

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And in the specific case of the response to the decisions of the TC, the European executive notes that the approach adopted by Lisbon “moves away from the commitment assumed during the program “to implement compensatory measures” dimension and quality equivalent “sinkers.

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However, this slippage in 2014 is attributed to “extraordinary” situations and the Commission estimates that the deficit target of 2.5% “remains achievable.” A statement made known before the draft budget for next year and especially before Pedro Passos Coelho has today assumed that the government decided to modify this objective to 2.7%

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Even before this last detail is known, Brussels has already left two notices to comply with the deficit target originally planned for next year: the measures provided Sinkers for 2015 by TC even have to be replaced by “additional measures”; and if the macroeconomic scenario deteriorates, the Portuguese authorities have to be “prepared” to “specify new measures.” Ie, to toughen austerity

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