Updated stability programme of Portugal, 2006-2010 - Main contents
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official title
Council opinion of 27 February 2007 on the updated stability programme of Portugal, 2006-2010| Legal instrument | Opinion |
|---|---|
| Original proposal | SEC(2007)188  |
| CELEX number i | 32007A0328(02) |
| Document | 27-02-2007 |
|---|---|
| Publication in Official Journal | 28-03-2007; OJ C 71 p. 5-8 |
| End of validity | 31-12-9999 |
28.3.2007 |
EN |
Official Journal of the European Union |
C 71/5 |
COUNCIL OPINION
of 27 February 2007
on the updated stability programme of Portugal, 2006-2010
(2007/C 71/02)
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(3) thereof,
Having regard to the recommendation of the Commission,
After consulting the Economic and Financial Committee,
HAS DELIVERED THIS OPINION:
(1) |
On 27 February 2007 the Council examined the updated stability programme of Portugal, which covers the period 2006 to 2010. |
(2) |
The macroeconomic scenario underlying the programme envisages that real GDP growth will pick up from 1,4 % in 2006 to 1,8 % in 2007 and 2,4 % in 2008 and eventually to 3 % per year over the rest of the programme period. Assessed against currently available information, this scenario appears to be based on favourable growth assumptions for 2008 and for the outer years, with the output gap closing rapidly. The programme's projections for inflation appear realistic. |
(3) |
For 2006, the general government deficit is estimated at 4,6 % of GDP in the Commission services' autumn 2006 forecast and in the new update, which would correspond to the target set in the previous update of the stability programme. According to the new update, both total government revenue and expenditure level targets have been largely met. As percent of GDP, both ratios are somewhat lower than in the Commission services' autumn 2006 forecast. |
(4) |
The main goal of the programme's medium-term budgetary strategy is a lasting correction of the large fiscal imbalances, notably a reduction of the general government deficit to below the 3 % of GDP reference value in the year 2008 and further budgetary consolidation thereafter. Substantial steps towards fiscal consolidation are planned throughout the programme period: the government deficit is targeted to gradually decline from 4,6 % of GDP in 2006 to 0,4 % in 2010; the adjustment path for the primary balance is similar, with an improvement from a deficit of 1,7 % of GDP in 2006 to a surplus of 2,5 % in 2010. The planned deficit reduction is to be achieved mainly by curbing primary expenditure, the overall level of which is to decline in real terms over the programme period thanks to corrective measures of a structural nature concentrated on restructuring central government, personnel and public services and also on controlling social security and health expenditure. In the earlier years of the programme, higher tax revenues coming mainly from an increase in some rates and lower tax benefits, and the continued efforts in fighting fraud and tax evasion, also contribute to fiscal consolidation. The programme confirms the planned adjustment outlined in the December 2005 update of the stability programme against a largely unchanged macroeconomic scenario. |
(5) |
The structural balance (i.e. the cyclically-adjusted balance net of one-off and other temporary measures) calculated according to the commonly agreed methodology is planned to improve from a deficit of around 3 % of GDP in 2006 to
% by 2010. Over the programme period, the structural balance is planned to be reduced by an average of almost
% of GDP per year. The medium-term objective (MTO) for the budgetary position presented in the programme is a structural deficit of 0,5 % of GDP, which the programme aims to achieve by 2010, one year earlier than implicitly targeted in the previous programme. As the MTO is more demanding than the minimum benchmark (estimated at a deficit of around 1
% of GDP), achieving it should fulfil the aim of... |
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