15 March 2013

Statement by VP Rehn on the seventh review mission to Portugal

The Commission will propose to the Council an extension to 2015 of the deadline for the correction of Portugal's excessive deficit, to give more breathing room for Portugal to continue with the implementation of its reform agenda.

The determined implementation of Portugal’s economic adjustment programme is continuing. Structural reforms have led to a substantial improvement in competitiveness and this will be further enhanced by the recent agreement on severance pay, the strengthening of the framework for regulators and measures to boost competition in services.

There is growing investor confidence in Portugal’s prospects for a durable return to full market financing during 2013. These prospects will be further enhanced by the envisaged adjustment in maturities on Portugal’s EFSF-EFSM loans and I hope we can take some important decisions in this regard and give a strong message of confidence at next month’s Eurogroup and ECOFIN meetings in Dublin.

The European Commission has stood by Portugal throughout this difficult adjustment process and we will continue to do so. The Portuguese people have made very significant sacrifices and I am fully aware of how hard the economic situation of Portuguese households remains. The far-reaching reforms adopted in the context of the programme are creating the conditions for a more dynamic economy and a more inclusive labour market, even if the impact of these reforms will take some time to be fully felt.

In parallel, the sustainability of Portugal’s public finances is being improved through consistent fiscal consolidation. The weaker-than-expected growth prospects mean there is a strong case for a further extension in the fiscal adjustment path for Portugal, while continuing to improve the structural balance at a steady pace. The Commission will propose to the Council an extension to 2015 of the deadline for the correction of Portugal’s excessive deficit, to give more breathing space to continue with the implementation of the reform agenda. This agenda has one aim: to deliver the sustainable growth and job creation that the Portuguese people need.

Press release

EC/ECB/IMF-statement

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