Press Release: Commission assesses stability programmes of Greece and Portugal

Having examined their updated stability programmes, the European Commission finds that significant structural budgetary adjustment is under way in Portugal and Greece. The achievement of the medium-term budgetary targets is, however, surrounded by risks, and strong efforts to further consolidate public finances are still required. Greece appears to have corrected its excessive deficit in 2006, but the budgetary consolidation pace should be strengthened from 2007 onwards to fully exploit the strong growth prospects and to address the risk of higher-than-expected deficits from 2008 onwards. The fiscal policy strategy of Portugal is broadly consistent with a correction of the excessive deficit by 2008, conditional on the full and effective implementation of the measures envisaged and on the adoption of additional measures in case of lower-than-projected economic growth. Both countries remain at high risk as regards the long-term sustainability of public finances.