Monday

18th Feb 2019

Portugal held up as symbol of EU recovery

  • Portugal had to borrow more than €70 billion from EU and International Monetary Fund to avoid bankrupcy (Photo: Paul Arps)

Portugal is no longer in breach of EU deficit rules, in a turn-around for the bailout state that symbolised broader economic recovery, the European Commission said on Monday (22 May).

“It’s really a very good and a very important piece of news for Portugal … for the Portuguese people”, Pierre Moscovici, the French commissioner, who is in charge of fiscal discipline, told press in Brussels.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • Moscovici (r): "Very important piece of news for ... Portuguese people" (Photo: European Commission)

He said Portugal’s deficit was forecast to stay below the EU target of less than 3 percent of it GDP “in a durable manner”.

He added that this forecast did not include Portugal’s plans to prop up some of its ailing national banks, but he said he had received “assurances” from Lisbon that it would not overstep the mark.

He said that Croatia had also met the three percent target, meaning that the commission could recommend that EU states should end a so-called “excessive deficit procedure” against Portugal and Croatia, when they meet to discuss the issue next month.

That would still leave France, Greece, Spain, and the UK under the disciplinary procedure, but Moscovici noted that the situation in Europe had significantly improved since the height of the sovereign debt crisis some six years ago, which led Portugal to seek an EU bailout in 2011.

“If the Council [member states] confirms our recommendation next month, just four countries will stay under the corrective arm”, he said.

“We have passed from 24 countries to four countries and we hope that by 2018 we will pass from four to zero”.

Moscovici described Europe’s economic recovery as “uneven” and “fragile”.

He warned that Greece would only leave the excessive deficit procedure next year if it managed to comply with creditors’ demands on the terms of its bailout.

The commission warned Romania to take “urgent” measures to correct its overspending.

It said Italy had narrowly avoided reprimand after making a “correction” in its spending, worth 0.2 percent of its GDP. Belgium, Finland, and Lithuania also narrowly avoided reprimands after the commission invoked rules on “flexibility” vis-a-vis promised reforms.

Valdis Dombrovskis, the Latvian commissioner, who is in charge of the euro, also said the good news on Portugal came amid an overall “positive backdrop”.

He said the EU economy was on course for a fifth consecutive year of growth this year (1.9%), and a sixth one next year.

He said the aggregate budget deficit was just 1.5 percent in the eurozone and 1.7 percent in the EU and that these were forecast to keep going down.

He also said that levels of employment in the EU were “the highest on record”, but he warned that “we need to make growth more inclusive, so that all people can feel the recovery”.

Marianne Thyssen, a Belgian politician who is the EU commissioner in charge of employment and social policy, said that meant that 233 million people were in work and 6 million jobs had been created since 2014, but that 19 million EU nationals were still unemployed.

She urged Bulgaria and Hungary to improve their welfare systems, and for Ireland and Spain to help parents with childcare so that they could get into the labour market.

Give Macron 'a chance', says EU finance chief

EU finance chief Moscovici expected France to reduce its deficit, but put "no pressure" on its new leader. All EU member states are expected to grow this year.

News in Brief

  1. Visegrad countries meeting with Israel called off
  2. EU ministers call climate change 'direct and existential threat'
  3. Seven MPs leave Britain's Labour Party
  4. Czech PM: May's EU elections 'most important ever'
  5. 'History will judge us': May tells MPs on Brexit
  6. Trump warns EU on release of Islamist fighters
  7. Venezuela expels 'conspiratorial' MEPs
  8. Holocaust dispute upsets Israel's EU lobbying

Opinion

Eastern Europe Matters

The foreign ministers of Sweden, Poland and the Czech Republic reflect on 10 years of the Eastern Partnership with Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.

Stakeholders' Highlights

  1. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  2. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  3. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  4. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  5. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  6. Nordic Council of MinistersNordic ministers take the lead in combatting climate change
  7. Counter BalanceEuropean Parliament takes incoherent steps on climate in future EU investments
  8. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  9. Nordic Council of MinistersSeminar on disability and user involvement
  10. Nordic Council of MinistersInternational appetite for Nordic food policies
  11. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  12. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups

Latest News

  1. Italian populists could be second biggest force in EU parliament
  2. Merkel defends Russia ties, ridicules Trump on cars
  3. British MPs condemn Facebook CEO's misrule
  4. EU's chance to step up on Hungary and Poland
  5. ESA pushback against new EU space agency plan
  6. Sluggish procedure against Hungary back on table
  7. Could Finnish presidency fix labour-chain abuse?
  8. Brexit and trip to Egypt for Arab League This WEEK

Join EUobserver

Support quality EU news

Join us