Union to enjoy the flexibility of the Stability and monitor the budget boost of 1.2% of European GDP, claimed yesterday by the European Commission to accelerate the recovery and "dampen the wind of recession in the short term ".
If you want to avoid a new dispute with the EU - which would be the third - Lisbon has only a window from one year to slightly increase the budget deficit above the 3% of GDP, warned yesterday the commissioner Joaquin Almunia, the presentation of "Plan European Recovery. "
For countries close to 3%, as Portugal, the Pact does not wide margin: in "exceptional circumstances" - evaluated by exogenous shocks or recession year - Brussels could accept excessive deficit above 3%, if they are temporary and remain close to this amount. Yesterday, the Commissioner Joaquin Almunia said that "close means few tenths - not many - and temporary means a year," back in a preliminary version that provided for two years. Portugal will present a deficit of 2.2% this year - in 2009, however, the government has already admitted overcome this value, with changes made by HP to the State Budget gives a maximum margin by 2.7%. The Commission anticipates a slip by 2.8% and 3.3% in 2010. If corrected in 2011, this route would be allowed in the room.
Barroso said that "not all countries can give 1.2% of its GDP because there are different points of departure - some will give more, others less." In this second group, Almunia says, are all those who have little or no room for maneuver.
However, the EU needs of France and Italy to realize its plan for recovery. And as these countries also are in fragile fiscal positions, Portugal can recount with understanding, if you need a long path of correction under a new procedure for excessive deficit.
In 2005, Portugal has benefited from a period of three years to reduce a budget deficit of 6.8% of GDP to below the 3%, and ended up doing so in two years. "What these countries [including Australia] should do is say right now what they are doing in the future, to ensure the sustainability of medium-term to give assurances to the markets," says Pisani-Ferry, economic adviser to Barroso. Commissioner Almunia warned that each case is a case which will have to assess the measures that States include in Stability programs that will show up to December 1 this year, or in supplements that include the end of the year.
Socrates praised plan and prepare response
The Portuguese Prime Minister has praise for the plan presented yesterday by the European Commission in Brussels, to promote a reaction between the 27-reaction to the economic crisis.
José Sócrates, the second found the Economic Daily, now wants to examine the reactions of the main EU heads of government, to realize the true margin of maneuver that may ultimately win, with the official approval of the plan, already in December in Brussels.
The expectation of the Portuguese Government focuses, for now, the tax issue. But, after Gordon Brown have implemented a decline in VAT, France and Germany came quickly to secure land that would not go ahead in the same direction.
Maybe so, Socrates was not final yesterday in response to a possible mexida in taxes. But stressed in an implicit sign that this may not be your path, that Portugal had already lowered the VAT this year.
As to bet on investments, Socrates not only praised the speech for Barroso, as pointed as a show that the chosen path is right in Portugal. Whether the new margin guaranteed by Brussels may be used by Socrates to go on this strategy wager.
The suggestions from Brussels:
1 - Reduction of taxes such as VAT or IRS
Brussels proposes to reduce taxes and social contributions to the lowest levels of income. To support the private sector, particularly small and medium enterprises, and reviving the economy, the European Commission advises the temporary reduction of VAT. This is one of the most challenged by Germany and France, who prefer a policy of public investment. This week, the United Kingdom fell VAT of 17.5% to 15%.
2 - An increase in public investment
The European Investment Bank can lend up to 15 billion per year, within a maximum period of two to support public investment and use EU funds that have not yet been spent on projects of transport infrastructure and improving access to Internet. The European Commission also urged the member states and the financial system to reduce the rates for loans and giving credit guarantees to companies.
3 - direct support to the needy
Brussels demands that will be released as the European Social Fund (about 75 billion euros between 2007 and 2013) for the poorest people and asks for revision and extension of the rules for awarding the European Globalization Adjustment Fund, so that it can intervene in quickly in key sectors of the economy, as the car. The aim is also co-finance the training of unemployed and help companies survive.
If you want to avoid a new dispute with the EU - which would be the third - Lisbon has only a window from one year to slightly increase the budget deficit above the 3% of GDP, warned yesterday the commissioner Joaquin Almunia, the presentation of "Plan European Recovery. "
For countries close to 3%, as Portugal, the Pact does not wide margin: in "exceptional circumstances" - evaluated by exogenous shocks or recession year - Brussels could accept excessive deficit above 3%, if they are temporary and remain close to this amount. Yesterday, the Commissioner Joaquin Almunia said that "close means few tenths - not many - and temporary means a year," back in a preliminary version that provided for two years. Portugal will present a deficit of 2.2% this year - in 2009, however, the government has already admitted overcome this value, with changes made by HP to the State Budget gives a maximum margin by 2.7%. The Commission anticipates a slip by 2.8% and 3.3% in 2010. If corrected in 2011, this route would be allowed in the room.
Barroso said that "not all countries can give 1.2% of its GDP because there are different points of departure - some will give more, others less." In this second group, Almunia says, are all those who have little or no room for maneuver.
However, the EU needs of France and Italy to realize its plan for recovery. And as these countries also are in fragile fiscal positions, Portugal can recount with understanding, if you need a long path of correction under a new procedure for excessive deficit.
In 2005, Portugal has benefited from a period of three years to reduce a budget deficit of 6.8% of GDP to below the 3%, and ended up doing so in two years. "What these countries [including Australia] should do is say right now what they are doing in the future, to ensure the sustainability of medium-term to give assurances to the markets," says Pisani-Ferry, economic adviser to Barroso. Commissioner Almunia warned that each case is a case which will have to assess the measures that States include in Stability programs that will show up to December 1 this year, or in supplements that include the end of the year.
Socrates praised plan and prepare response
The Portuguese Prime Minister has praise for the plan presented yesterday by the European Commission in Brussels, to promote a reaction between the 27-reaction to the economic crisis.
José Sócrates, the second found the Economic Daily, now wants to examine the reactions of the main EU heads of government, to realize the true margin of maneuver that may ultimately win, with the official approval of the plan, already in December in Brussels.
The expectation of the Portuguese Government focuses, for now, the tax issue. But, after Gordon Brown have implemented a decline in VAT, France and Germany came quickly to secure land that would not go ahead in the same direction.
Maybe so, Socrates was not final yesterday in response to a possible mexida in taxes. But stressed in an implicit sign that this may not be your path, that Portugal had already lowered the VAT this year.
As to bet on investments, Socrates not only praised the speech for Barroso, as pointed as a show that the chosen path is right in Portugal. Whether the new margin guaranteed by Brussels may be used by Socrates to go on this strategy wager.
The suggestions from Brussels:
1 - Reduction of taxes such as VAT or IRS
Brussels proposes to reduce taxes and social contributions to the lowest levels of income. To support the private sector, particularly small and medium enterprises, and reviving the economy, the European Commission advises the temporary reduction of VAT. This is one of the most challenged by Germany and France, who prefer a policy of public investment. This week, the United Kingdom fell VAT of 17.5% to 15%.
2 - An increase in public investment
The European Investment Bank can lend up to 15 billion per year, within a maximum period of two to support public investment and use EU funds that have not yet been spent on projects of transport infrastructure and improving access to Internet. The European Commission also urged the member states and the financial system to reduce the rates for loans and giving credit guarantees to companies.
3 - direct support to the needy
Brussels demands that will be released as the European Social Fund (about 75 billion euros between 2007 and 2013) for the poorest people and asks for revision and extension of the rules for awarding the European Globalization Adjustment Fund, so that it can intervene in quickly in key sectors of the economy, as the car. The aim is also co-finance the training of unemployed and help companies survive.
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