Portugal will activate the European Union's (EU) budget safeguard clause within the framework of the possibilities granted by Brussels. This move aims to allow the country to temporarily bear additional energy-related costs amid the current crisis without it being considered a breach of rules.
"The Commission believes that, following requests from various countries, it should establish an exception clause now, just as it did with the rules on defense spending. We support this decision and will activate this clause in the same way we did for defense," announced Finance Minister Joaquim Miranda Sarmento, according to Lusa.
Speaking to Portuguese journalists on his way to the Eurogroup meeting in Luxembourg, Joaquim Miranda Sarmento said that according to data from the International Monetary Fund (IMF) and the European Commission, Portugal ranks fifth among EU countries in terms of support provided relative to its Gross Domestic Product (GDP).
The minister added that this situation allows the country to maintain and even strengthen these support measures depending on the course of the conflict in Iran, triggered by attacks from Israel and the United States.
Accordingly, Portugal aims to use the EU's temporary exception provision to increase public spending beyond the forecasted level without this being seen as a violation of the European bloc's budget rules. This step will be implemented alongside other existing flexibilities already in place to cover defense expenditures.
"The current crisis is different from that of 2022" According to Joaquim Miranda Sarmento, the ongoing crisis is not the same as in 2022. The minister argued that the interest rate hike announced by the European Central Bank (ECB) following inflationary pressures caused by the war in the Middle East was "not entirely necessary," remarks he made while evaluating the ECB's decision. "Naturally, the European Central Bank has concerns.
The ECB played a very important role in 2022 [during the previous energy crisis] and has now deemed it appropriate to send this initial signal to the market, but we will see in the coming months. I maintain my view that this signal might not have been necessary or fully justified, but of course, I respect the ECB's authority and independence," said the Finance Minister, according to Lusa.
"In any case, the European Central Bank decided to raise interest rates, but we are in a very different context both in terms of inflation and the ECB's interest rates," he added.
