With Portugal’s 2018 budget finally approved by parliament, “elements of the troika” have arrived in Lisbon to go through the government’s financial plans and performance.
This is the 7th evaluation since Portugal exited the terms of its €79 billion bailout and will focus on the deficit – Portugal forecasting one of a 1.1% for 2018, while the troika has calculated 1.8%.
Also under the microscope will be the PS government’s decision to revert public sector salary cuts and “unfreeze” career progressions – “a theme that promises to occupy many hours” of discussions as the team from the IMF, ECB and EC considers the changes spell “increased pressure on spending”.
Talks are expected to start on Wednesday and extend through to Thursday evening.
Meantime, the final text of the budget is being drawn up for onward passage to President of the Republic Marcelo Rebelo de Sousa, who has said that he is looking forward to reading it with interest.
As these developments play out, Spanish daily El Pais has reported that Brussels is preparing a dual plan to help “shore up the euro” and centralise economic guidance under a common finance minister “for the entire EU”.
The plan involves the creation of a European version of the IMF – to be known as the European Monetary Fund – and which would “bail out countries in exchange for economic reform and promote fuller union”.
The project is expected to be revealed in detail next week.