Portugal spent a decade under Brussels’ magnifying glass over macroeconomic imbalances

Ten years later, on 16 June 2014, having been included by Brussels in the early warning mechanism for macroeconomic imbalances of the European Semester, Portugal left the European Commission’s magnifying glass on this Wednesday.

In June 2014, when Portugal completed the economic adjustment program of the troika (European Commission, European Central Bank and International Monetary Fund), it was also the year the country was integrated into the European Semester and received recommendations to reduce the deficit, among other measures .

In 2011, the Macroeconomic Imbalance Procedure was introduced, which allows for close monitoring of countries identified as having excessive imbalances.

In 2016, the European Commission assessed Portugal’s macroeconomic imbalances as “excessive”, which implied “country-specific monitoring” during the European Semester carried out by technical missions.

Two years later, the imbalance continued, especially due to “large levels of net external liabilities and private and public debt.”

Last year, Brussels’ assessment recorded a decline in Portugal’s debt and deficit in 2022, with the Community Executive recommending that Lisbon ensure “prudent fiscal policy, in particular limiting the growth of nationally financed primary current expenditure below potential output growth in the medium term.” .

This Wednesday, Brussels said that Portugal no longer faces macroeconomic imbalances, citing a “reduction in vulnerabilities” at the fiscal level.