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Eurogroup open to revision of Portugal’s fiscal targets

Published on 27/05/2013

Portugal could possibly obtain additional time to balance its public finances, but has yet to make such a request, the head of eurozone finance ministers said Monday.

“If more time is necessary because of economic setback then more time might be considered at that time,” Eurogroup chief Jeroen Dijsselbloem said at a joint press conference with Portugese Finance Minister Vitor Gaspar.

Dijsselbloem, who is the Dutch finance minister, added that Portugal has yet to request a revision of its fiscal targets from its international creditors, the EU and IMF.

Prime Minster Pedro Passos Coelho said last week that Portugal may request another revision to deficit targets agreed as part of its 78-billion euro international bailout.

The revision would be the third one granted to Portugal after already winning leniency from the European Union and International Monetary Fund in March and December.

Currently Portugal is supposed to bring its public deficit down from 6.4 to 5.5 percent of gross domestic product this year, then 4 percent in 2014 and back under the EU ceiling of 3.0 percent in 2015.

However Portugal’s economy is forecast to contract by another 2.3 percent this year and unemployment rise to a record 18.2 percent, according to official forecasts.

Dijsselbloem said the country’s “European partners are fully committed to support Portugal where and when necessary.”

Gaspar said “further flexibility will be used in the future but obviously only if circumstances so make it necessary.”

The country announced last week a massive tax credit and several other measures intended to revive growth.