Eurogroup statement on Portugal

EU News 201/2014

5 May 2014

The Eurogroup welcomes the conclusion of the twelfth and final review mission by the Commission, the ECB and the IMF that Portugal's adjustment programme remains on track to be concluded and commends the Portuguese authorities for their successful implementation of the programme. The Eurogroup also commends the Portuguese people for their efforts and achievements under difficult circumstances. The success of Portugal's financial assistance programme also clearly illustrates our resolve to work together to ensure the cohesion and stability of the euro area.

The Eurogroup welcomes the programme achievements of consolidating public finances, stabilizing the financial sector and bringing the economy back on a recovery path. Fiscal adjustment has been notable, as evidenced again recently by the significantly better than targeted budgetary outcome in 2013 and the confirmation of the 2014-2015 deficit targets. Wide-ranging structural reforms have helped to make the economy more flexible and competitive, significantly reducing external imbalances and rebalancing growth towards the tradable sector. This has contributed to confidence, the economic recovery and declining unemployment.

The Eurogroup welcomes that these positive developments have been instrumental in regaining investor confidence in the Portuguese economy, allowing the sovereign to refinance its debt on the market. The Eurogroup also concurs with the authorities that the current comfortable cash buffer represents a significant backstop against domestic and external risks. The Eurogroup and ECOFIN ministers' decision of April 2013 to extend EFSF and EFSM loan maturities has further contributed to supporting market sentiment and lowering the borrowing needs in the future, thus further improving Portugal's debt sustainability.

Against this background, the Eurogroup supports the Portuguese government's decision to exit its macroeconomic adjustment programme without successor arrangement.

Source and additional information:
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ecofin/142482.pdf

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