Mário Centeno
Governor of the Bank of Portugal Mário Centeno

European Commission continues to criticise Portugal’s State Budget 2020

In what has been described as a blow to Portuguese finance minister Mário Centeno in his capacity as head of the Eurogroup, the European Commission has heaped further criticism on Portugal’s budget plan for 2020, stressing it signals insufficient progress in reducing the country’s structural deficit.

Reuters news agency has written its story very much from the Commission’s point of view, describing economics commissioner Paolo Gentiloni as taking a “harsh line, even though Portugal’s debt is falling and it expects to run a budget surplus this year”.

But nationally, the media’s take has been that “we’ve heard this all before”… and Brussels’ stance is simply “more of the same”.

Economy minister Siza Vieira told parliament yesterday – as MPs continue to discuss the budget, ministry by ministry – that these kind of warning shots “are almost habitual”, and invariably end up being unnecessary.

The Commission’s bottom line is that in failing to make more progress regarding the structural deficit, Portugal could end up in ‘non-compliance’ with European measures.

Says Reuters, the Commission has found seven other European countries to be “at risk of breaking EU rules”.

Far from sounding concerned, Mário Centeno has assured that Portugal “always complies with measures established by the European Commission”.

Indeed, he told the 15th annual conference of the association of economists in Lisbon yesterday that he struggles with the “exhaustion of compliance every day” because it has become “a quite boring thing…”

Reports on the conference suggest Centeno’s speech may have been one of his last as minister of finance now that he has been mooted for the top job at the Bank of Portugal.

It’s unclear when a decision will be made on who is to take over from the current governor of the central bank – but Mr Centeno’s tenure as leader of the Eurogroup comes to an end in July this year.

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