Portugal might fail 2020 budgetary objectives – EU warns

Portugal is at risk of violating all European budgetary rules in 2020, in case the country does not take immediate measures nor better its economic performance beyond what Brussels is expecting. The warning comes from the 2019 Stability and Convergence Programme, and it was already communicated to the Portuguese Government last April.

According to the Programme, Portugal should not be able to reduce the structural deficit during this and next years, failing to reach the medium-term budgetary objectives. The note prepared by the Directorate-General of Economic and Financial Affairs, currently under the supervision of Commissioner Pierre Moscovici, stressed that structural balance is expected to increase over this year, suffering no alteration next year.

If this scenario comes true, Portugal would fail to accomplish the yearly adjustment to which it is obliged by the European Union Council, staying way behind the safe margin provided by the European Commission. The Programme team also believes expenditure will increase more than what the Government forecasted, thus violating the benchmark imposed by the rules.

The Minister of Finance and President of the Eurogroup, Mário Centeno, has been saying publicly that the Government is looking forward to eliminating the structural deficit by 2020, something Brussels does not believe, arguing that Portugal will not reach its medium-term budgetary objectives.