Recommendation for a Council Decision establishing that no effective action has been taken by Portugal in response to the Council Recommendation of 21 June 2013

The Council, acting upon a recommendation by the Commission, decided on 2 December 2009 that an excessive deficit existed in Portugal and issued a recommendation to correct the excessive deficit by 2013 at the latest. Following the request by the Portuguese authorities for financial assistance from the European Union, the Member States whose currency is the euro and the International Monetary Fund (IMF), the Council granted Union financial assistance to Portugal. The Memorandum of Understanding on Specific Economic Policy Conditionality between the Commission and the Portuguese authorities was signed on 17 May 2011.

Since then, the Council has issued two new recommendations to Portugal (on 9 October 2012 and 21 June 2013), which extended the deadline for correcting the excessive deficit to 2014 and 2015 respectively. In both recommendations, the Council considered that Portugal had taken effective action, but unexpected adverse economic events with major unfavourable consequences for government finances had occurred.

In its Recommendation of 21 June 2013, the Council established a deadline of 1 October 2013 for effective action to be taken. Portugal was exempted from a separate reporting under the excessive deficit procedure and reported in the framework of its macroeconomic adjustment programme. Risks of non-compliance with the Council Recommendation of 21 June 2013 were highlighted in subsequent assessments.

A new assessment of the action taken by Portugal to correct the excessive deficit by 2015 in response to the Council Recommendation of 21 June 2013 leads to the conclusion that the response of Portugal to the Council Recommendation has been insufficient. Portugal did not put an end to its excessive deficit by 2015. The fiscal effort falls significantly short of what was recommended by the Council.

• Primary Source

ESO: Background information: Stability and Growth Pact: update on the fiscal situation of Spain and Portugal http://www.europeansources.info/record/stability-and-growth-pact-update-on-the-fiscal-situation-of-spain-and-portugal/

EUR-Lex: SWD(2016)240: Analysis by the Commission services of the budgetary situation in Portugal following the adoption of the Council Recommendation to Portugal on 21 June 2013 with a view to bringing an end to the situation of an excessive government deficit http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2016:240:FIN

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