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European Commission

MEMO

Brussels, 4 June 2012

Statement by Vice President Olli Rehn on the Fourth European Commission/European Central Bank/IMF Review Mission to Portugal

As the fourth Troika review mission to Portugal has concluded today, I welcome the assessment that Portugal is on track with the implementation of its programme.

While the present economic conditions are challenging, economic growth in the first quarter of this year turned out better than expected. Likewise, the external adjustment is proceeding swiftly, so that the determined efforts of the Portuguese authorities will bear fruit with growth expected to return next year.

While both the public and the private sector need to continue to reduce indebtedness it remains essential that credit remains available to sound companies, particularly in the tradable sector. On-going efforts in this respect by the Portuguese authorities are being supported by actions from the ECB and enhanced involvement of the European Investment Bank.

I welcome the continued firm commitment of the Portuguese authorities to address the remaining challenges with determination and step up efforts where necessary. This includes staying the course on fiscal consolidation, at the same time, restoring external cost competitiveness.

At the same time, it remains important to continue increasing competition and reducing rents in the network and sheltered services sectors, including in the electricity sector, which will benefit consumers and taxpayers and contribute to social balance.

Support from across the political and social spectrum has been, and continues to be, a key element for success of reforms.

Broad-based support is particular important in view of the situation of the current labour market, as structural reforms should contribute to create jobs in the medium term. The European Commission will also support the Portuguese government in its endeavour to tackle rising unemployment in the short term through the reprogramming of the EU Structural and Social Funds. I believe that the programme is socially balanced and seeks to protect the most vulnerable groups of the society.

I would like to assure Portugal of the Commission's continued support in effective implementation of the programme; a programme that is ambitious, but realistic, and one that works towards restoring a growing and healthy economy for the benefit of future generations in Portugal.


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