“Budget execution 2016 is being followed to the letter”, then “there is no plan B,” says Centeno. More measures only in the OE 2017
For the first time in the history of the Stability Pact, there are countries that will be fined for violating the rule that requires that the public deficit will be below 3% of the product gross domestic product (GDP). They are Portugal and Spain, yesterday confirmed the Ecofin, the council of finance ministers of the European Union. Lisbon regrets the “counterproductive” decision and says he will give everything to get a “zero fine”. Financially, it may not be impact, but morally there.
In Brussels, the end of the meeting, Mario Centeno revealed a bit like were the work. “What argued so far is that the assessment should take into account an entire economic, financial, social, and during the years of implementation of the programs [years 2013 14:15] now want, because Europe can not take forgetting decisions there are great tensions within Europe that have to have a political response, “said the minister
and gave examples:.” the question of the UK referendum and refugees are matters to which we have devoted much time in the Ecofin and the various European councils. “
But Wolfgang Schäuble, the all-powerful German minister, was perentório. “We had a discussion about whether it is intelligent to take this decision in the current context of the British referendum, but I and others said it was very important that the European rules apply.” The idea is “not to punish the country, is to encourage them.”
The punitive proceedings against Portugal and Spain was therefore adopted by the Ecofin. Few were against. Ireland, Spain and France were the most friendly voices of the Portuguese claims.
But Centeno assured that even with fines (zero at best) is still a plan B. That is not accurate, the government refuses forward with further measures (spending cuts, especially, but also extra increases revenue) to placate Brussels requirements.
on the other side of the negotiation, the key idea is that the more guarantees, commitments and measures new government goes, the easier it is to get to zero penalties and no freezing of funds.
yesterday morning Jeroen Dijsselbloem, Minister of Finance of the Netherlands and head of the Euro Group (one of the most aggressive in favor of punishment), said he hoped the two countries have “an offensive reaction and say what they will do to solve the problems and not a defensive reaction. Sanctions are a zero possibility”, but must appear measures that support this boon. “It will take more measures,” was the phrase that was to echo in the room.
Valdis Dombrovskis, European Commissioner for the euro, also admitted that Portugal and Spain may have “zero fine” and that the suspension structural funds can be avoided. “After seeing the arguments and taking into account several factors such as the efforts made and the economic and financial crisis that the two countries had to deal with and the measures they propose to take, there is the possibility of the fine be reduced even zero.” The suspension of structural funds “will come into force next year,” by which Portugal and Spain “will have time to react and correct the situation, avoiding the loss of funds.”
Centeno relativized the need for action . The deficit reduction is the normal way of public finances in the coming years, implying that the additional measures that Europe so insists should appear so, but in the Budget 2017 to be presented in mid-October.
the Ecofin emphasized that the case against Portugal forward (back to the European Commission) for lack of effective measures in the past that lograssem reduce the deficit to below 3%. Was 3.2% of GDP last year.
Centeno’s response was that “in 2016 the budget implementation is being followed to the letter. There is no plan B”. “There is nothing that can be done in terms of budget implementation in 2016,” because this is running in line with expectations and “there’s no reference to further action, anywhere” by the Ecofin, who spoke only about the past, “the period 2013-2015″.
the Portuguese ruler found that “from here, the value of sanctions, the continuation of the process is not automatic, there is a political decision matter and is at this time that the political arguments must prevail. “
considered, as it has always done, that the decision of the Ecofin is” unjustified and counterproductive “and that” Europe’s citizens do not the regulations. ” From Lisbon, the Prime Minister António Costa also criticized. “I am confident that the European Commission prevails more sense than at the Eurogroup meeting and the Juncker President has the good sense that other presidents have not revealed to have on the conduct of this process.”
The negotiation that follows aims to reach a solution that does not penalize the country, at least financially, said Centeno. “We will begin the process of direct contacts with the European Commission to explain the government’s position, which, as you know, is contrary to the current procedure.” The government wants “a process in which the country is not affected”, ie there is “zero penalty”.
With regard to the possibility of freezing of European funds, Centeno explained that “the understanding we have, and we have been working with the European Commission, is the measure for the funds will not have a practical realization “.
Portugal, like Spain, now has ten days to” argue “in his defense against the idea of European punishment. The European Commission will have 20 days to recommend the model of effective penalties to the country (that type and that value not exceeding the fine to 0.2% of GDP, around € 360 million). After the Commission decision, the Council has ten days to approve. Or not.
Marcelo speaks stubbornness
The President regrets the “stubbornness” of the Commission as to one decimal deficit and said he was not worried because he believes that there comes a zero penalty. “Portugal has a government in office and there is the part of the commission – could be but there is not. – Questions about how is going to budget implementation The Commission has made no doubt is hard the government is itself raising doubts before a. peaceful position of the Commission, “said Marcelo Rebelo de Sousa
Speech had distinguished Maria Luis, who pointed the finger at the government responsibility for possible sanctions. “Last year’s accounts were closed by the current government and the most important decisions were taken by the current government,” said the former Minister of Finance, to then defend your point of view: “There is no lack technical arguments to defend that Portugal actually could not even be subject to this discussion of sanctions and was in the presentation of these arguments that the government failed, or incompetence, or – which I believe will be the case, I hope it is more the case – for political reasons. “
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