Portugal wants “intelligent budget policies” for June debate

The Portuguese presidency of the European Union (EU) will hold a high-level summit in Lisbon on June 21 focused on the recovery plans of the 27 member states, defending “smart fiscal policies” in the face of the crisis generated by the pandemic.

In a debate on the European semester at the European Parliament’s plenary session in Brussels, the secretary of state for European affairs, Ana Paula Zacarias, stressed that an appropriate balance between increasing investment and implementing sustainable structural reforms was needed to support the recovery.

Speaking on behalf of the Portuguese presidency of the Council of the EU, Ana Paula Zacarias confirmed Portugal’s intention to organise in Lisbon on 21 June the Recovery Summit – Shaping European Growth, a conference to discuss the prospects of the current economic and financial situation.

She noted that member states are currently working on recovery and resilience plans, including their reform and investment agenda, in line with the four dimensions of environmental sustainability, productivity, equity, and macroeconomic stability, to access post-crisis EU funds.

The Portuguese presidency is fully committed to this process. We hope to reach the end of our six-month term with all the national plans duly approved, as well as with the own resources decision ratified by all member states, said Ana Paula Zacarias.

Zacarias added that the necessary measures to support people should be maintained as long as necessary, promoting cohesion and convergence, so, in her view, the European semester should continue to adapt, in an allusion to the more flexible budgetary rules of Brussels due to the crisis caused by the pandemic of Covid-19.

At the beginning of this month, the European Commission issued a communiqué in which it expressed its support for maintaining the suspension of the rules on budgetary discipline also in 2022, given the pace of recovery of the European economy in the context of the crisis of the covid-19, while reserving a definitive decision for May.

The EU executive’s position is in line with the wishes of many member states like Portugal, which advocated that the flexible application of the rules of the Stability and Growth Pact (SGP) be maintained next year.

At stake is the activation of the general derogation clause of the EU budgetary framework exactly one year ago, in March 2020.

Present at today’s debate, European Commission executive vice-president Valdis Dombrovskis, who oversees the European Semester, stressed that functional fiscal rules are needed in the current crisis more than ever.