Last year's deficit could've been even smaller. The INE revised it to 2%, but if it wasn't for the impact of the aid given to banking, the Portuguese deficit would have been two tenths smaller.
According to Eurostat’s calculations, Portugal’s deficit in 2016 could have been 1.8% if the country did not need to help financial institutions. All in all, last year, the negative impact of the aid given to the Portuguese banking was 0.2% of GDP. The information is brought forward in April’s first notification about the Euro Area deficits disclosed this Monday by the European statistical office. In 2015, that same calculation made the deficit increase to 2.8%, since the impact of the banking aid was 1.6%.
In the table for that calculation, Eurostat warns, however, that these numbers are not used in the context of the Excessive Deficit Procedure, a supervisory method from the European Commission Portugal is hoping to leave this year. There are several countries where the interventions made in the banking sector were accounted for in the public balance. In Portugal, it was in 2014 and 2015 that the aid given to banking had a larger impact in the deficit, namely because of the resolution of BES and Banif.
“Overall during the reference period of 2007-2016, the most significant increase in deficit due to government interventions in financial institutions was in Ireland, followed by Greece, Slovenia and Cyprus“, Eurostat explains in the Background note (April 2017). There are several countries which improved their deficit because of the dividends from previous interventions, namely Denmark, Sweden and Luxembourg.
This Wednesday, the Portuguese newspaper Jornal de Negócios brought forward that the help given to the Portuguese banking, since 2007, already added up 20.9 million euros to the debt; the impact of those aids over the past 10 years reached 11.3%.
From that volume of aids, since 2007 to 2016, 15,131 million euros had an impact in the deficit, having the largest amounts in 2014, 2015 and 2010. In that same period, the State only received back 2.2 billion euros of income. This information is brought forward by an additional report in which the Eurostat paints a portrait of the Members States’ interventions aiming to aid financial institutions.