Fears loom over Portugal’s budget deficit

Fears loom over Portugal’s budget deficit

For the second time in a month, the Portuguese government has been warned that it is “at risk of failing to meet deficit targets”.
Economists’ repeated warnings that this could signal the need for a second bailout hang ominously in the air as Brussels has confirmed that Portugal’s sums simply don’t add up.
In its State Budget for 2015, the government calculates a deficit of 2.7% of GDP. This is still above the deficit agreed with the troika during the adjustment programme, but below the 3% defined by Europe.
Nonetheless, the European Commission has confirmed its “doubts over the government’s estimates”, writes Diário de Notícias.
As the Resident reported at the beginning of November, Brussels fears Portugal could run to as high a deficit as 3.3% – and thus fail to complete its targets.
Reiteration of Brussels’ fears comes in a week when the OECD has also warned of “persistent stagnation” affecting eurozone economies.
2014 began lack-lustre and has continued to slump, said the Organisation for Economic Cooperation and Development, calling on the European Central Bank to introduce more stimulus measures.
As the PSD/CDS-PP coalition continues to affirm it knows what it is doing, it is aware that Portugal is only one of many countries at risk of running over-deficit.
Almost half those under the EC’s spotlight are in a similar boat – Belgium, Spain, France, Italy and Malta are all “threatening” to break the rules of Europe’s stability pact on deficit and debt.
According to DN, Brussels is “particularly worried” about France, Italy and Belgium.