Portugal should leave the Excessive Deficit Procedure before the Summer, says António Costa

The prime minister António Costa assured this Thursday that “it all points to” Portugal leaving the Excessive Deficit Procedure before the Summer, saying the country is reaching a “turning point”.

“It all points to Portugal leaving the Excessive Deficit Procedure. It is a very important turning point for our international image, for our macroeconomic stability and for us to be able to continue the effort companies and families have been making in order for the country to have a more consolidated public finance, more economic growth and more employment”, stated the prime minister.

This stance taken by the leader of the Portuguese Executive happened after Pierre Moscovici made a statement on the matter: “I hope leaving is possible and happens quickly. We will assess that possibility over the next couple of days and weeks”.

Last week, Eurostat confirmed the Portuguese 2016 budgetary deficit was 2% of GDP and confirmed last year’s balance as the least negative since 1974. These data clearly pave the way for Portugal to leave the EDP: the deficit sits below the 3% reference value predicted in the Growth and Stability Pact and it is also below the goal of 2.5% of GDP Brussels imposed to Portugal in July 2016.

Nonetheless, before the European Commission recommends the end of the Procedure, it has to conclude the change in the deficit will last. The EC will determine if Portugal leaves based on their Spring economic forecast — which will include the 2017 and 2018 projections — and also based on the analysis made to the National Reform Programme the Portuguese Government presented in Brussels, last week.