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Spring cheer for Portugal as EU issues country recommendations

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Spring cheer for Portugal as EU issues country recommendations

Pierre Moscovici - Photo EC

(BRUSSELS) - The European Commission recommended Monday that the EU's Excessive Deficit Procedures be closed for Portugal and Croatia, as it issued its spring package of country-specific recommendations.

On the basis of its report, the Commission is recommending that the Council abrogate the Excessive Deficit Procedures for the two countries as they have brought their budget deficits below the 3% of GDP. Portugal has been under an excessive deficit warning since 2009.

The 2017 country-specific recommendations (CSRs), which set out the EU executive's economic policy guidance for individual Member States for the next 12 to 18 months, also showed that Greece had brought its excessive deficit to below 3 per cent in 2016 and 2017, in line with EU rules.

On the other hand, the Commission finds 8 countries - Germany, Luxembourg, Malta, the Netherlands, Bulgaria, Czech Republic, Denmark, Sweden – that are projected to be at or above their medium-term budgetary objectives both in 2017 and 2018.

Some Member States have been found to be diverging from their budgetary objectives, said EC vice-president Valdis Dombrovskis, and "this is why, for example, Italy had to take additional structural measures worth 0.2% of GDP this year."

The Commission said that it is recommending the Council give warning to Romania "on the existence of a significant observed deviation from the adjustment path towards the medium-term objective in 2016."

The CSRs come against a back-drop of continuing recovery in the European economy for the fifth consecutive year.

Commissioner Pierre Moscovici reported growth rates of nearly 2 per cent in EU in 2016, improving public finances and employment levels at a record of nearly 233 million people. In fact unemployment is at its lowest level since 2009, while investments exceed pre-crisis levels in some EU Member States.

However, while economic conditions in the euro area and the EU are improving, challenges do remain, M Moscovici warned: "slow productivity growth and the legacies of the crisis, including disparities within and across countries, continue to weigh on the economy, as does uncertainty stemming mostly from external factors," he said.

The Commission has called on Member States to "use this window of opportunity to strengthen the fundamentals of their economies by implementing the economic and social priorities identified in common at European level - boosting investment, pursuing structural reforms and ensuring responsible fiscal policies."

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