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The European Commission warns that the biggest challenge for Portugal, like other European countries, is responding to the negative impact of the pandemic, but it also warns about the “specific challenges of low investment and productivity”.
“In the case of Portugal, the biggest challenge, as in all Member States, is to face the negative impact of the coronavirus pandemic, both on a human and economic level. Although the political response was essential to mitigate the impact of the pandemic, Portugal faces specific challenges of low investment and productivity ”, says the European Commission, in evaluating the post-surveillance reports for Portugal, Spain, Cyprus and Ireland, published this Wednesday.
The European Commission also notes that “active debt management has smoothed out the debt amortization profile and helped reduce interest charges.”
In the assessment of Portugal, the Community executive notes that Portugal, together with Spain, Cyprus and Ireland, the repayment capacities of each country remain strong. However, the country is part of the group of 12 countries in which imbalances or excessive imbalances had already been identified in February this year, together with Germany, Bulgaria, Cyprus, Croatia, Spain, France, Greece, Ireland, Italy. , Holland, Romania and Sweden -.
“Although imbalances were decreasing before the outbreak of the Covid-19 crisis, the risks of imbalances appear to be increasing in Member States that were already in a situation of imbalance before the Covid-19 pandemic,” says the community executive . , which “recommends conducting in-depth analysis to identify possible macroeconomic imbalances and assess their severity.”
The post-program alert and surveillance mechanism report was published this Wednesday, as part of the Brussels autumn package, which includes evaluations of the budget drafts, which it considered “globally in line with the Council’s recommendations of 20 July 2020” .
“Most of the measures support economic activity in a context of great uncertainty,” he stresses. “In the case of Belgium, Spain, France, Greece, Italy and Portugal, taking into account the level of their public debts and the significant medium-term sustainability challenges even before the Covid-19 pandemic outbreak, it is important to ensure that, the budgetary support measures adopted preserve fiscal sustainability in the medium term ”, underlines the Commission, as pointed out by the European Commissioner for the Economy, in an interview with Jornal Economico.
Brussels further explains that “some of the measures envisaged in the draft budget plans in Slovakia, France, Italy and Lithuania do not appear to be temporary or to be accompanied by compensatory measures. Lithuania submitted its draft budget plan on the basis of an unchanged political scenario, so you are invited to submit an updated budget plan ”.
Likewise, it highlights that “taking into account the activation of the general exception clause of the Stability and Growth Pact, the budgetary recommendations made by the Council in July 2020 were of a qualitative nature”, which is why the opinions analyze, above all, If the measures The support budgets planned for next year are temporary and, if not, compensatory measures are foreseen.
The Portuguese debt issue “cannot be left out” in the medium term, warns Paolo Gentiloni
(Updated at 11:34 am)
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