CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. EU Praises Portuguese Fiscal Policy

EU Praises Portuguese Fiscal Policy

by Ulrika Lomas,, Brussels

26 December 2011

The European Commission has delivered a report on progress made by the Portuguese government in its efforts to bring the nation's fiscal house into order.

The report concludes that overall Portugal has made good progress on a number of fronts, entitling the nation to a third tranche of European funding, worth EUR5.3bn (USD6.9bn).

The Commission noted that during 2011 Portuguese authorities were forced to address 'sizeable slippages' on budgetary targets. These were counteracted by a one-off surcharge on personal income tax and an increase in the value-added tax rate on electricity and natural gas, brought forward from next year to October 1, 2011. As a result of these efforts, and the transfer of banks' pensions funds to the state social security system, the government will achieve its 2011 deficit target of 5.9% of Gross Domestic Product.

The Commission however noted that “this one-off measure will only be exceptionally used to meet the deficit target for this year and has to be seen in the context of a highly ambitious 2012 budget.”

Welcoming proposed fiscal policy for the coming year, the Commission said the 2012 budget contains "bold and credible measures of a permanent nature" to address fiscal sustainability, mainly focused on retrenchment in public expenditure. The Commission was optimistic on this basis that the 2012 deficit target, of 4.5% of GDP, could be attained.

The Commission further reported that the nation's banking sector is working towards meeting higher capital requirements as required under the program. However, the Commission urged continued efforts by banks to deleverage whilst safeguarding adequate credit for dynamic sectors to facilitate economic growth.

TAGS: tax | pensions | European Commission | value added tax (VAT) | Portugal | fiscal policy | banking | budget | social security | individual income tax | Europe

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »