Post-Programme Surveillance for Portugal. Autumn 2014 Report

Abstract:
Staff from the European Commission (EC), in liaison with ECB staff, visited Lisbon between 28 October and 4 November under the first post-programme surveillance review. The mission was coordinated with the IMF's post-programme monitoring mission and staff from the European Stability Mechanism (ESM) participated in meetings of relevance to their Early Warning System. This report gives an overview of the main findings of the mission and of the challenges faced by Portugal.
The economic and financial conditions in Portugal have further improved since the end of the EU/IMF-supported programme in June 2014. Sovereign yields remain low and normal market-financing is being gradually restored. Nevertheless, economic recovery is constrained by high levels of public and private debt and by a weak external environment which highlights the need for further competitiveness gains. The pace of budgetary consolidation has been adversely affected by a series of one-off factors, despite strong revenue performance. Moreover, efforts to reduce the underlying structural budget deficit have clearly slackened. Progress in structural reforms has lost momentum, with an uneven pace of implementation across policy areas.

European Commission: DG Economic and Financial Affairs: European Economy: Occasional Paper No. 208, December 2014: Post-Programme Surveillance for Portugal. Autumn 2014 Report http://ec.europa.eu/economy_finance/publications/occasional_paper/2014/op208_en.htm

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