The European Commissioner for Economic and Financial Affairs has felt it necessary to 'clarify' statements he made on Monday that Portugal must impose the so-called ‘Plan B’ additional fiscal measures to make sure the 2016 State Budget works and that the country’s figures do not blow through the boundaries of the Stability Pact.
Pierre Moscovici changed tacl today and said that nothing has changed and that there is "trust" in the Portuguese government's ability to run the 2016 State Budget. This is not what he said the day before when commenting that the additional measures “must be implemented.”
Portugal’s ever confident Prime Minister António Costa said the measured were being devised but would not be needed.
Speaking to the media today after an Ecofin meeting, the Commissioner said, "I think honestly that you should not create an incident around this matter. If my words were interpreted ambiguously, I want to clarify this morning: no, there is no change in our position, there's confidence in Portugal’s ability to integrate the views of the Commission and the Eurogroup recommendations.”
This is despite the Eurogroup yesterday reconfirming its view that there is a serious "default risk" inherent in the 2016 budget
After the controversy caused by yesterday’s statements, Portugal’s Finance Minister, Mario Centeno also insisted that "there is, of course, no change in the assessment that both the Commission and the Eurogroup have make of the budget" and that additional measures will not be needed.
Pierre Moscovici has had to eat his words while stopping short of apologising. Let’s hope that Plan B indeed is not needed this year and that the Costa Plan for the Portuguese economy does in fact work.
