The President of the Eurogroup said today in Brussels that there are "serious concerns" with Portugal and called on countries to follow and to encourage public support for the eurozone’s budgetary rules.
National governments in eurozone countries still hold “the real responsibility” for budgets, social measures and other economic policies, said Jeroen Dijsselbloem today, adding that “The main problems in the eurozone have been caused by bad national policies” and not the euro area’s stability and growth pact.
“Nations are generally improving their compliance with fiscal rules and more central control might not help the European Union achieve its goals,” Dijsselbloem said, adding that, “shifting a lot of power from national parliaments to the European level could be detrimental to the whole project.”
Except Portugal apparently as in a hearing at the European Parliament in Brussels, Dijsselbloem said there remain "serious concerns" referring to the accepted State Budget for 2016 which he still doesn’t like.
"If you look at last winter forecast for Portugal, there is a reason for this concern and as you know Portugal left the programme without any guarantees in terms of credit lines."
Dijsselbloem said that it is crucial for Portugal to remain financially independent and this requires access to funding markets, adding that the Portuguese Government is aware of the situation and has expressed its strong and sincere commitment to fulfill the current pact.
The head of the eurogroup was responding to a question over the concerns raised by the State Budget 2016 which not only was late but also contained a set of potentially expensive electoral commitments that have to be implemented.
"The Commission did well, expressed its concerns and said that the Portuguese authorities should do more to comply with the Stability and Growth Pact and also, what perhaps is even more worrying, that Portugal continues to have access to funding markets," said Dijsselbloem.
Pedro Passos Coelho also was in Brussels today and said the concern from the eurogroup is genuine but that there is concern from inside Portugal as well as from outside.
Passos Coelho said that several international institutions have raised concerns about the current budget and about the uncertainty in the air as Portugal seems to have changed form a country that was following an agreed budgetary path to one now that may not achieve its goals.
"The political parties in Portugal may have their differences about the best way to proceed, but if, from an external point of view, there are doubts about our ability and our will to fulfill the commitments we have made in the past to maintain an economic trajectory in a positive direction, it hurts us all, and I think the government should be sensitive to that," said the former prime minister, suppressing a grin.
In addition to any budgetary aspects causing unease in those looking at Portugal, the billions of euros wasted by the Portuguese government in bailing out a riddled banking sector compounds a growing concern that Portugal is a house of cards which lacks the rigourous controls necessary to monitor the banking system and the ability to develop when consumed by corruption and cronyism.
