The European Commissioner for Economic Affairs has now decided that Portugal is a huge economic success story and needs to be held up as an example to others.
Pierre Moscovici now predicts that Portugal’s deficit will be 1.8% this year and that economic growth "will probably be above 2.5%" as he completed a one day visit to Lisbon to meet politicians and say encouraging things to the press.
Moscovici said today that "Portugal's progress is very impressive." This alone will bringing cheer to the battered governor of the Bank of Portugal whom he met, before going on to a meeting with the prime minister.
During his brief visit, Pierre Moscovici gave a press conference to state that the European Commission wants Portugal to be the big success story in Europe.
Since his last visit to the country in February 2016, Moscovici says that he has seen great progress, with the twin challenges now being to "continue to reduce the deficit" and "to continue to consolidate the structural deficit."
The European Commissioner praised the "high quality dialogue" he has maintained with the Portuguese government, and spoke of the interpretation that Brussels will adopt over future deficit figures.
"We are going to use a margin of interpretation in a way that is friendly to growth. We would never propose a budgetary measure to penalise growth," Moscovici said, referring to the new ploy in Brussels to fiddle the figures for good pupils by opting for an 'intelligent interpretation' of the budgetary rules.
The European Commissioner, with 20:20 hindsight, said that sanctions and cutting structural funds to Portugal and Spain, as has been debated for Portugal when its economy was less buoyant, "would have been bad."
"This Commission is a pro-growth and pro-employment Commission. We want to have fully respected rules but we also want to have results in growth and employment. The debate will be conducted on this basis with the aim of combining financial stability with growth, which is also crucial."
On the economic front, the priority must be "to turn this recovery into a lasting growth", which Moscovici considered "to be possible," taking into account "the quantity and quality of exports, the return of investment and the explosion in tourism" and the fact that "the eurozone is getting stronger."
As for next year's budget, which is set to bring tax cuts for lower-income families and the unfreezing of civil service pay grades, Moscovici avoided this banana skin and declined to comment on these "policy choices," saying that these are up to the government.
