As the 2016 State Budget debate concluded today in the Portuguese parliament, minutes of the special meeting in Brussels on February 5th reveal those euro ministers who thought the budget should be rejected.
Several commissioners of the executive led by Jean-Claude Juncker wanted to kick the budget back to the Portuguese Prime Minister António Costa which finally was approved amid much back-slapping.
The minutes reveal that both Dombrovskis as Commissioner for Economic Affairs and Pierre Moscovici (both members mandated to negotiate with the Portuguese authorities), only gave the budget the “green light” if it was accompanied by clear warnings about the risks and the possibility of further sanctions in case of breaches of the rules.
In his speech, the President of the European Commission, Jean-Claude Juncker, considered that "the Commission's decision was not political in nature, since the rules were fully respected and the numbers carefully checked."
It seems that whatever arm-twisting went on, the final result was approval and only with the addition of inconvenient reservations about the risk involved.
The European Commission Vice President responsible for the Euro, Valdis Dombrovskis, is recorded in the minutes as saying that in accordance with the Stability and Growth Pact and in particular the rules on coordination of budgetary policies, the Commission could have asked Portugal to submit a new budget, "since the technical analysis of the initial draft has identified a particularly serious breach of the budgetary policy obligations," reads the minutes.
At an earlier February 2nd weekly meeting, the ‘Juncker Commission’ discussed the Portuguese budget plan, but failed to reach any conclusion as it needed more information and more effort to restrain spending in Portugal before it could give an opinion.
Three days later, on February 5, at the extraordinary meeting held in Brussels to finalise the budget proposal after several days of intense negotiations between the executives in Brussels and Lisbon, the ‘Juncker Commission’ finally approved the document, which a week later got the green light from the Eurogroup of EU finance ministers.
António Costa had to develop several additional stand-by measures in case of economic emergencies to avoid his budget being rejected, with the Commission warning that the budget "is at risk of violations of the rules of the Stability and Growth Pact,” and calling on Portugal to take the necessary measures to ensure it meets the budgetary rules."
Meanwhile, in Lisbon today the budget entered its second day of debate with the Minister of Labour, Solidarity and Social Security accusing the former coalition PSD and CDS-PP parties of having nothing much to say about the detail, blaming them of still being sore that they lost the October 2015 election.
The original State Budget 2016 was approved in Parliament before it went to Brussels in its raw state, with ‘for’ votes from the PS, Left Bloc, PCP and Greens, and ‘against’ votes from the PSD and the CDS-PP.
The final version was approved on Tuesday eveing in an historic vote that saw the Communist Party and the Left Bloc join forces with the Socialist Party.
