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Portugal back to fiscal health, says EU | Portugal back to fiscal health, says EU |
(about 1 hour later) | |
Portugal has become the latest bailed-out eurozone country to receive a clean bill of health from the European Commission after its budget deficit fell to 2% of GDP last year. | |
This brings it well below the EU limit of 3% and allows it to exit the Commission's excessive debt procedure. | This brings it well below the EU limit of 3% and allows it to exit the Commission's excessive debt procedure. |
After its 2011 bailout, Portugal saw austerity policies under a centre-right government until elections in 2015. | After its 2011 bailout, Portugal saw austerity policies under a centre-right government until elections in 2015. |
Since then, a Socialist-led coalition has reversed those austerity measures. | Since then, a Socialist-led coalition has reversed those austerity measures. |
EU economy commissioner Pierre Moscovici said the outcome was "extremely good news" for Portugal. | EU economy commissioner Pierre Moscovici said the outcome was "extremely good news" for Portugal. |
The Portuguese finance ministry hailed the Commission's decision, calling it a "turning point". | The Portuguese finance ministry hailed the Commission's decision, calling it a "turning point". |
"It expresses the evaluation of the Commission that Portugal's excessive budget deficit has been corrected in a sustainable and lasting way," the ministry said in a statement. | "It expresses the evaluation of the Commission that Portugal's excessive budget deficit has been corrected in a sustainable and lasting way," the ministry said in a statement. |
"Confidence in the Portuguese economy is beginning to be reflected by international institutions." | "Confidence in the Portuguese economy is beginning to be reflected by international institutions." |
Under EU rules, member states are not supposed to run annual deficits greater than 3% of their total economic output. | Under EU rules, member states are not supposed to run annual deficits greater than 3% of their total economic output. |
Portugal now complies with those rules, but some other member states are less fortunate. | Portugal now complies with those rules, but some other member states are less fortunate. |
On Monday, the Commission, which has the power to oversee eurozone countries' draft budgets, said France and Spain were still subject to the disciplinary procedure. | On Monday, the Commission, which has the power to oversee eurozone countries' draft budgets, said France and Spain were still subject to the disciplinary procedure. |
France's deficit hit 3.4% last year, while Spain's was even worse at 4.5%. | France's deficit hit 3.4% last year, while Spain's was even worse at 4.5%. |
Although all EU countries are required to observe the 3% limit, only the 19 countries that use the euro as a currency can be fined. | Although all EU countries are required to observe the 3% limit, only the 19 countries that use the euro as a currency can be fined. |
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