Source: European Parliament
The new Economic Governance Framework supports Member States in achieving fiscal sustainability as well as sustainable economic growth.
Both are critical for the EU’s economic strength in today’s challenging global environment. In particular, the new framework encourages reforms and investments that will lay the foundations for long-term economic stability and sustainable growth.
As part of the implementation of the new framework, the Commission recommended on 26 November 2024 to the Council to endorse the fiscal path contained in Portugal’s medium-term fiscal-structural plan, which corresponds to an annual fiscal adjustment of 0.1% of gross domestic product for the period 2025-2028[1].
The new framework differentiates between Member States according to their fiscal position. As stipulated in Regulation 2024/1263[2], the Commission applies a replicable, predictable and transparent methodology to assess the plausibility of whether the projected public debt ratio is on a downward path or remains at prudent level. For the first round of medium-term plans, this methodology is described in the Debt Sustainability Monitor 2023[3].
The prior Commission’s guidance to Member States, derived from the Commission debt projection framework, is published when the medium-term plan is submitted, in accordance with Article 9 of the regulation, together with spreadsheets allowing to reproduce the calculations.
A working group for debt sustainability analysis has been established to explore possible methodological improvements.
- [1] See : https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/stability-and-growth-pact/preventive-arm/national-medium-term-fiscal-structural-plans_en#portugal
- [2] https://eur-lex.europa.eu/eli/reg/2024/1263
- [3] See: https://economy-finance.ec.europa.eu/publications/debt-sustainability-monitor-2023_en