Portugal will activate the safeguard clause within the European Union's (EU) budget rules under the framework recognized by Brussels. The country aims to temporarily assume the additional energy-related costs caused by the current crisis without this being considered a breach of the rules.
Speaking to Portuguese journalists on his way to the Eurogroup meeting in Luxembourg, Finance Minister Joaquim Miranda Sarmento conveyed that the European Commission believes it should establish an exemption clause here, similar to the one for defense spending, in response to requests from various countries.
"The Commission believes it should create an exemption clause here, just as it did for defense spending rules, based on requests from several countries. We support this decision; we will activate this clause in the same way we did for defense," he said.
The minister noted that according to data from the International Monetary Fund (IMF) and the European Commission, Portugal ranks fifth among EU countries in terms of support provided relative to its Gross Domestic Product (GDP).
Miranda Sarmento added that this situation allows the country to maintain and even strengthen its support measures.
Accordingly, Portugal aims to use the EU's temporary exemption provision to increase public spending beyond the planned level without this being seen as a violation of the bloc's budget rules. This measure will be applied alongside other flexibilities already in place to cover defense expenditures.
"The Current Crisis Differs from 2022"
According to Joaquim Miranda Sarmento, the current crisis is not the same as that of 2022. The minister argued that the interest rate hike announced by the European Central Bank (ECB) following inflation pressures caused by the war in the Middle East was "not entirely necessary."
"The ECB played a very important role in 2022 [during the previous energy crisis] and has now deemed it appropriate to send this initial signal to the market, but we will see in the coming months. I maintain my view that this signal could have been withheld and was not fully necessary, but of course, I respect the ECB's authority and independence," he said.
The minister also added that the ECB had decided to raise interest rates regardless, but the current context is very different in terms of both inflation and central bank rates.
