Brussels green lights Portugal’s budget but warns of overspending dangers

The European Commission has given the green light to Portugal’s State Budget for 2026 but has flagged significant risks of reneging on Stability and Growth Pact rules.

And the EU spending watchdog has not ruled out starting proceedings against Portugal from May if the country clocks up an excessive deficit regarding budget execution and discipline for 2025.

In the Spring, and after Portugal’s National Statistics Institute (INE) closes the books for national accounts for 2025, there will be a data-based and not forecast-based evaluation which will enable Brussels to see if Member-States are keeping within their public spending limits.

It will be based on comparing growth of net expenditure in the EC’s Spring 2026 forecast with the maximum net expenditure growth recommended by the European Council, taking into account flexibility margins for each country.

Forecasts currently point to Portugal exceeding the maximum overspend allowance from Brussels by 0.7% of GDP in accumulated expenditure.

And so far, looking at forecasts and published statistics, and without corrections through spending curbs, there seems to be a high probability of Portugal suffering a significant overspend this year on the acceptable limits and leeways allowed by Brussels.

Source: Negócios