The president of the Eurogroup said today that Portugal will have to prove that its proposed measures in next year’s state budget "are effective."
The finance ministers of the eurozone met this morning to discuss the European Commission’s views and opinions to the 2015 budget proposals from member states and were not happy about Portugal's over-optimistic forecasts.
The Commission already has flagged up that it does not believe the prediction from Portugal’s government that a deficit of 2.7% is achievable next year and has questions about the impact of various austerity and tax raising measures in the 2015 state budget.
Portugal gives every indication of heading for a 3.3% deficit, a situation that for the Eurogroup president Jeroen Dijsselbloem now requires effective measures to prevent 'an excessive deficit situation.'
"Portugal has made it clear that it already has put forward a number of measures and a number of reforms in the 2015 budget plan and will continue the dialogue with the Commission to prove that these measures are effective," Dijsselbloem said during today’s press conference in Brussels.
The Portuguese government has insisted that the existing measures are sufficient to meet the deficit goals and that is a "point of honor" to be below 3%.
The Eurogroup praises Portugal's commitment towards the Growth and Sability Pact and its ‘implementation of necessary measures’ and in the last meeting of the Eurogroup, Jeroen Dijsselbloem expressed support for Portugal’s Finance Minister Maria Luís Albuquerque.
When asked about the conclusions of the first post-Troika report on Portugal’s progress, which were critical of the Portuguese government’s willpower to reform, Dijsselbloem said there was "no reason to question the effort and commitment" of the country in the reforms.
"My Portuguese colleague always has been very clear on this. So she has my full support," said Dijsselbloem at the time.
Comments
So the EU cannot be seen to be pushing for further austerity, because it cannot afford to pull the rug from under the national government. But there is no doubt that Dijsselbloem will be leaning heavily on his Portuguese colleague to find further savings.