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Brussels, 28 February 2012
Statement of Vice-President Rehn on Portugal
As the third Troika review mission to Portugal comes to a close, I welcome the conclusion that the programme is on track. Portugal is making steady progress to restore fiscal sustainability, ensure a gradual deleveraging of the banking sector and advance structural reforms to enhance competitiveness and boost growth and jobs. It is encouraging that long-standing weaknesses in the wider public sector are being addressed and that imbalances have started to correct, as shown, for instance, by a declining trade deficit.
I count on the commitment of the Portuguese authorities to continue to address the remaining challenges with determination and step up efforts where necessary. Boosting competitiveness and rebalancing the economy towards the tradable sector requires reforms in both labour and product markets. Reducing excessive rents in network industries – for instance electricity - and in the sheltered services sector will also bring down costs for consumers.
This is an ambitious, but realistic, programme. The broad political support it enjoys remains a key asset for its success. I fully recognise that the inevitable economic adjustment and the ongoing reforms involves courage and sacrifices from the Portuguese people. At the same time, the programme pays particular attention to protecting the most vulnerable in society. Concerning the current economic forecast for Portugal, most of the adjustment is expected for 2011 and 2012, and the economy should start expanding again from next year.
The European Commission will continue to support Portugal in implementing the programme effectively, with the aim of bringing its economy back on the road to recovery. I am convinced that these efforts will be rewarded by the return of confidence in the Portuguese economy.