The Ministry of Finance is already in contact with the European Commission on the preparation of the new medium-term national budget structural plan regarding expenditure controls, which is due to be submitted to Brussels in October after its completion.
As the European Union (EU) begins to implement new fiscal rules that require countries to prepare a medium-term national budget framework plan, the Portuguese minister responsible for it, Joaquim Miranda Sarmento, told Lusa that he has already begun “contacts” [com a Comissão Europeia] and internal work in the Ministry of Finance” as part of such preparation.
“This work will last until mid-October and therefore the implementation of this plan will be synchronized with the state budget for 2025. We will await the first instructions from the Commission, which are subject to discussion.” [mas] In fact, there is a cost control rule,” the official added.
At the same time, “there are two more equally important rules: [como] maintain the budget balance and continue to reduce public debt,” emphasized Joaquim Miranda Sarmento.
“Assuming the fiscal balance is maintained and the growth rate that is projected for the Portuguese economy, public debt will continue to decline by around 45 percentage points per year, and that is something we are very comfortable with in terms of what the fiscal outlook is for the period ahead.” years,” the minister assured.
The official added that “the goal is to keep government accounts balanced while continuing to reduce the national debt and bring it to about 80% of gross domestic product (GDP) in 2028, when the legislature ends.”
At the end of April last year, the EU began implementing new Community rules on deficits and public debt (but maintaining ceilings of 3% and 60% of GDP respectively), given the reform of the bloc’s fiscal rules, which Member States will begin applying for in 2025 after drawing up national plans.
It is now planned that member states will submit multi-year plans to Brussels by the autumn, covering four or seven years, which will then be discussed with the community executive, with a view to fully implementing the rules in 2025.
Under the new rules, member states must then prepare their national medium-term fiscal framework plan, in which they commit to following a multi-year net public spending trajectory and explain how they will implement priority investments and reforms.
In an interview with Lusa today, European Commission Executive Vice-President Valdis Dombrovskis said that on Friday Brussels will publish a reference trajectory for each country, namely Portugal, outlining how the country should reduce its public debt.
In his statements to Luse, Joaquim Miranda Sarmento also said that in October the executive branch will present the proposed state budget for 2025, “which will have a small “surplus.” [excedente]which is about 0.2% – 0.3% of GDP this year and a similar value next year.”
When asked about the Bank of Portugal’s warnings about a possible return to deficits due to measures with fiscal implications, such as tax cuts and government salary negotiations, the finance minister explained the warnings as “what the decisions of Parliament were in the absence of a government.”
“We are talking about hundreds of millions of euros and this should obviously be a cause for concern because this is not within the scope of government decisions and, […] if they come to join others […] it is actually possible to go from a ‘surplus’ to a deficit,” a government official told Luse.
Author: Lusa
Source: CM Jornal
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