Pillows Brussels promised to require tightening in public services – publico

 
         

                 

                         
                     

                         

                 

 
 

António Costa and Mario Centeno continue to ensure that there will be no additional austerity measures this year and next, but the promises of compliance with fiscal targets made by the government on Monday to Brussels do guess for public services a tightening of their accounts during the second half of 2016.

in an attempt to convince the European authorities that will affect, in a likely slower growth scenario, the target of 2.2% deficit this year, a reduction of at least 0.2 percentage points in the structural deficit, the Executive assured in his hands three budget cushions that allow you to cope with shocks that arise in the economy: the ability to give effect to cativações additional expenditure provided for in State budget (OE), the possibility of not using the registered budgetary reserves and the possibility of spending less on wages than anticipated. All these pads require a containment effort by the services.

In cativações, according to which explains the government to Brussels in the letter sent on Monday, are concerned 346,200,000 euros (about 0.2% of GDP) expenditure which, although they have been in the budget can only be effectively used by services with the prior authorization of the Ministry of Finance.

Every year, the budgeted for the expense of blocking, particularly in terms of procurement of goods and services and investment. In OE 2016, however, the Government has chosen to take on an additional level of cativações that apply to services that benefit from an increase in their budgets.

Now, what those services were to know is that , in all probability, will not be able to rely on this budget increase and will even have to settle for a lower level of expenditure. It is precisely through these 0.2 percentage points of GDP cativações that the government hopes to make up the negative effects on the deficit of a weaker economic performance.

According to the accounts presented by the Government Brussels if GDP growth is 1.4% instead of 1.8% projected in the Budget, the tax revenue would be less than an amount equivalent to 03% of GDP, which would raise the deficit to 2.5%. However, thanks to cativações, the deficit would eventually stand at 2.3%, very close to the Government’s initial target.

Then there is the so-called budget reserve. This is an item of expenditure, present in all state budgets, which is intended to address unanticipated expenses that arise throughout the year. In 2016, the deficit is recorded at a value of 196.6 million euros, says the Government (UTAO, Technical Unit of Budget Support, has pointed to a value of 193.2 million euros). If you end up not being used, the deficit can be reduced by that amount.

However, for this to happen, it is necessary to make a contention in the accounts than in previous years did not happen. It is true that, by May, according to information disclosed by UTAO, only a very marginal amount of this reserve had been used, but in 2015, this time of year, also the budgetary reserve was still intact, which did not prevent at the end of the year, would eventually be all used.

this means that in order to benefit from the potential savings, utilities will have to be able to avoid any unanticipated expenses in the budget.

in personnel expenses, what the Government sent to Brussels was that the removal of pay cuts would represent a spending increase of less than EUR 97 million to what was expected. However, once again, achieving a savings of this type depends on the ability of utilities to control personnel admissions throughout the year.

All this will happen in an environment that promises to be difficult. The Government continues to invest in the 2.2% deficit, but the Commission has doubts, even though I assume that the deficit can be slightly below 3%, which could open the door to an exit from the excessive deficit procedure.