Home News Portugal government adopts 2016 draft budget without EU’s approval

Portugal government adopts 2016 draft budget without EU’s approval

Published on 04/02/2016

The Portuguese cabinet on Thursday adopted its 2016 draft budget without waiting for EU Commission approval, a government spokesman said.

The EU Commission had asked Portugal to revise its budget to adopt a tighter fiscal stance, and was to issue its verdict on the changes by Friday, the same day that the budget is scheduled to be submitted to the Portuguese parliament.

The draft budget “has been approved”, the spokesman told AFP, without giving details of the plan, which are to be made public only after deputies have seen the draft.

On Wednesday, a government official said that Portugal had agreed to lower both its budget deficit and growth forecasts following pressure from the EU Commission.

The new Socialist-led minority government, allied with the radical left, cut its projected budget deficit to 2.4 percent of Gross Domestic Product (GDP), from 2.6 percent announced two weeks before, the official said on condition of anonymity.

It also lowered its growth forecast to 1.9 percent, from 2.1 percent, after Brussels said the draft budget was too optimistic.

The European Commission on Tuesday demanded Lisbon rework its draft budget — which was delayed by Portugal’s inconclusive October elections — because it fell short of commitments to reduce public spending.

Portugal received a massive international bailout in 2011 that saved it from defaulting on its debt, but in return the country had to introduce a string of austerity measures.