BRUSSELS (MNI) – Approval of Portugal’s 2011 budget will restore
confidence in the southern European economy, European Commissioner for
economic and monetary affairs, Olli Rehn, said on Friday.
“By approving today this ambitious budget, but also by implementing
fiscal policy in a strict manner and pursuing an ambitious structural
reform agenda to increase potential growth and jobs, Portugal will
reinforce confidence in its economy,” Rehn said in an e-mailed statement
after the budget was passed.
Portugal is one of the high-debt and deficit countries currently at
the center of the Eurozone crisis, with market participants skeptical
about whether it will be able to curb its debt burden without external
help.
The budget plan will save around E5 billion and aims to reduce the
country’s deficit from 7.3% of its GDP this year to 4.6% next year. The
EU limit on budget deficits is 3%.
“The budgetary strategy of Portugal is appropriate, with ambitious
fiscal targets and broadly appropriate measures to reach the deficit
target of 4.6% of GDP in 2011,” Rehn added.
“Of course this fiscal consolidation effort, which is indispensable
to build a sound basis for medium-term growth and jobs, will have to
continue in subsequent years,” Rehn said.
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
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