The government announced today that the 2013 public deficit will be between 4.6% and 4.7% of GDP excluding the one off state support payment to rescue Banif.
If the €700 million given to Banif was to be added to the annual total, the deficit will be at least 5.1% as the state’s generosity to the bank was the equivalent of 0.4% of the deficit.
Finance Minister Maria Luís Albuquerque said the year had a positive result, "the budget figures for last year more than meet the fiscal targets set out."
This will be good news for the Troika whose proctologists are back in town at the end of February for the 11th regular examination.
"As in previous regular checkups, the Portuguese authorities with responsibilities under the programme will examine, together with representatives of the European Commission, the International Monetary Fund and the European Central Bank, the work and planning for the last months of the Economic Assistance Program," reads a lively statement from the PM’s office.
In euros, the general government deficit was €7.1515 billion last year, about €1,700 million below the figure agreed with the Troika. Much of the success against target was due to the extraordinary tax and fines amnesty last December which brought in an unbudgeted €1,200 million in a controversial operation that forgave 90% of fines owing in order to get tax and social security arrears into the government's account.
European commissioner for economic affairs, Olli Rehn, said that the budget data is "very encouraging" and show that the efforts Portugal has made to achieve "tangible results."
This result has not been without pain for the nation's taxpayers and pensioners as the government raked in €3.2 billion more tax in 2013 than it managed the year before. Troika congratulations should be sent to the Portuguese public rather than the Treasury. The nation's newly impoverished middle classes have remained relatively calm throughout this legally sanctioned robbery, necessary because of years of fiscal mismanagement and a bloated state sector that PM Passso Coelho tinkers with but fails significantly to curtail. Many trade unions have had enough and the civil forces of law and order have reached desperation point with promises of a 'bloodbath' should their complaints of impoverishment continue to be ignored. The armed forces have rumbled that all is not well in their ranks but so far have resisted the suggestions that a revolution again would solve the nation's problems.
On a european scale "The news about the Portuguese budget execution is rather encouraging. Combined with the gradual evolution of the economy, this shows that the efforts made by Portugal with the support and solidarity of the European partners, are showing tangible results," said Rehn in a statement released to the press in Brussels which failed to address the social downside of the budget results.
