IMF also calls Plan B Costa. And warns of risks in banking – TSF Online

There are risks in banking, also in e – and “we need a contingency plan.” Costa takes an IMF ears pull the reversal of policies. And hear suggestion to postpone wage and VAT returns.

The International Monetary Fund closed the third post-troika evaluation Portugal, already admitting that the country can meet a slightly deficit below 3% in 2016 (the estimate was 3.1% two months ago), but stresses that remain “significant risks” for budget execution. “Therefore, the IMF urged the Government of António Costa contingency plans order to comply with the 2016 budget targets, rationalizing public spending to contain the pressures of wages and pensions , and keeping the margins of budgetary maneuver. ” What will be higher taking into account the intention of the left to replace the 35-hour working week in the state

The leaders of the IMF dare to suggest working hypotheses:. If there is “evidence” that the objectives will not be met, the total reversal of pay cuts “may be delayed any longer,” while the IRS surcharge and reduction of VAT [restoration] may have to be postponed until it is adequate fiscal space. “

on the basis of this warning is the most pessimistic estimate for the development of the economy (1.4% this year, compared to 1.8% of the Government). But also a critique of the steps of Government, to have not taken advantage of reducing spending on unemployment benefits and interest, in order to meet the reduction in the structural deficit the criticism also applies to António Costa -. the Fund believes that the structural deficit will again rise this year by 0.5 % of GDP, given the “insufficient efforts” noting in OE already in place

for the PS government is more critical:. “ policy changes – already implemented or under study – involving at least a partial reversal of the structural measures adopted during the program “assistance, immediately ending some flexibility of labor laws. And that, adds the known report on Friday, will” hinder growth the medium term “of the economy. To labor issues are joined, for example, the reversals in transport concessions and the projected increase in the minimum wage. If more advance measures, warns the IMF, the institution will revise downwards the potential GDP of the country

The same is said about the measures in the budget:. Economic stimulus to consumption, as well as changes to taxes, may involve a rebalancing of economic activity for the sectors non-tradable, which can harm the country, says the Fund

the report adopted yesterday in Washington also alert to the situation of the Portuguese banking sector:. “the system bank sees hampered by low profitability and weak asset quality , and in need of public support recently, in December 2015 “. And calls on the Executive to be more ambitious in incentives for these problems, which represent “risk” additional to taxpayers, says the IMF, reminding the public support was also necessary to Banif “.

So being, sum up a notice to the Bank of Portugal:. the supervisory authorities should reinforce the attention – and the pressure on the banks, to the appointments of administrations, so that the profit margin increase

. Fund says that the new budgetary strategy Government leaves the government “vulnerable” to external risks and stresses even increased the risk of non-payment of what is owed to the IMF. – although still at a manageable level