Portugal should adopt prudent fiscal policy when possible

in News · 24-05-2020 10:17:00 · 1 Comments

The European Commission has recommended Portugal to adopt prudent fiscal policies as soon as economic conditions permit, after taking measures to combat the covid-19 pandemic.

In accordance with a recommendation specifically addressed to Portugal in the context of the spring evaluations of the European Semester, which evaluated the Stability Programme and the National Reform Programme, the European Commission urged Portugal to "pursue fiscal policies aimed at reaching prudent budgetary positions in the medium term and ensuring debt sustainability, encouraging investment".

In the same recommendations, and in line with the clause that allows countries, in the context of combating the pandemic, not to respect the rules of the Stability and Growth Pact, Portugal must "take all the necessary measures to effectively address the pandemic, sustain the economy and support subsequent recovery."

"The Commission's overall assessment confirms a significant deviation from the recommended adjustment path towards the medium-term budgetary target in 2019, and throughout 2018 and 2019 together. However, in light of the activation of the general escape clause [to the Pact Stability and Growth], no further steps are taken in the process of significant deviation", according to Brussels.

The Commission "prepared a report in accordance with Article 126 (3) of the Treaty due to the projected 3 percent rise in the deficit threshold in 2020", the analysis of which "suggests that the deficit criterion as defined in the Treaty and Regulation 1467 / 1997 is not filled".

In the context of combating the pandemic, Portugal must also "strengthen the resilience of the health system and ensure equal access to quality and long-term health care".

The Brussels recommendations also address employment, arguing that Portugal should support it and "give priority to measures to preserve jobs", as well as "ensure sufficient and effective social and income protection", and support "the use of digital technologies for ensure equal access to quality education and training and boost business competitiveness".

According to the European Commission, Portugal should also "implement temporary measures aimed at ensuring access to liquidity by companies, in particular small and medium-sized companies", and "encourage public investment projects and promote private investment to promote economic recovery".

"Focusing on investment in the green and digital transition, in particular in clean and efficient production and in the use of energy, railway infrastructure and innovation" is another of the recommendations of the community executive, who also calls for "increasing the efficiency of administrative and tax courts" .

The European Commission also estimates that the economic consequences must be distributed in an unbalanced way in territorial terms, "in particular in regions markedly affected by tourism, such as the Algarve and the peripheral regions of the Azores and Madeira".


In a word: AUSTERITY?

By Carl from Other on 26-05-2020 01:21
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