The European Commission on Tuesday urged the Portuguese government to “take the necessary measures” to ensure that the 2023 state budget (OE2023) is “in line” with fiscal prudence, warning of “risks” of deficits and debt to support families.
“The Commission invites Portugal to take the necessary steps in the national budget process to ensure that the budget for 2023 is in line with the recommendation adopted by the Council.”says the community leader in his message with the global assessment of next year’s budget proposals, released on Tuesday.
Taking into account the SB2023 proposal sent by Lisbon to Brussels and the Commission’s autumn forecasts, the institution intends to evaluate in Portugal next year “that growth in domestically financed current spending approaches potential growth in output over the medium term, subject to planned reductions in response to high energy prices, including temporary and targeted support for vulnerable families and businesses”.
“Consequently, an increase in primary current expenditure financed from the national budget runs the risk of not being in line with the Board’s recommendation.”Brussels notes.
The Council’s recommendation of mid-July stated that Portugal should in 2023 “Ensure prudent fiscal policy, in particular by limiting the growth of publicly funded primary current expenditures below potential growth in output over the medium term, taking into account continued temporary and targeted support for households and companies most vulnerable to rising energy prices and people. escape from Ukraine.
Already in a communication published on Tuesday, the European Commission emphasizes “consider that Portugal’s budget proposal runs the risk of only partially complying with the budgetary principles contained in the Council’s recommendation” although the country “has rapidly implemented emergency policy energy measures in response to exceptional increases in energy prices, expanding existing support measures and/or adopting new support measures in response to high energy prices will further boost national budgeted net current expenditures. and an increase in the deficit and public debt projected for 2023.”.
“Therefore, it is important that Member States better focus these measures on the most vulnerable households and vulnerable businesses in order to maintain incentives to reduce energy demand and that they be withdrawn as pressure on energy prices eases.Brussels insists.
For the leader of the Portugal community also “has made limited progress on the structural part of the budget recommendations […] and thus invites the authorities to speed up progress”.
In mid-July, the Council recommended that Portugal continue in 2023. “fiscal policy aimed at achieving prudent medium-term fiscal positions and ensuring robust and gradual debt reduction and medium-term fiscal sustainability through gradual consolidation, investment, and reforms”.
In mid-October, the government submitted proposal SB2023 to the Assembly of the Republic, which envisages Portugal’s economy growing by 1.3% in 2023, with a budget deficit of 0.9% of gross domestic product (GDP).
