Research Catalog

Title

The Fiscal Challenge in Portugal [electronic resource] / Stéphanie Guichard and Willi Leibfritz

Author

Guichard, Stéphanie.

Publication

Paris : OECD Publishing, 2006.

Details

Additional Authors

Leibfritz, Willi.

Description

31 p.; 21 x 29.7cm.

Summary

Portugal's fiscal policy has failed to durably reduce the deficit below the Stability and Growth Pact threshold of 3% of GDP and was submitted to the excessive deficit procedure of the EU Commission for a second time in 2005. The paper describes fiscal developments in Portugal over the past years and explores why earlier attempts of fiscal consolidation have failed. It also examines the new consolidation programme and assesses its chances of success and discusses further necessary steps to ensure consolidation over the longer term. It is argued that reasons for the failures of past consolidation efforts were the pro-cyclical policy during the earlier economic upswing and the reliance on one-off-measures which reduced the sense of urgency and commitment to undertake structural reforms and to address the chronic weak control of public spending. The new consolidation strategy is not relying on one-off measures in a context where Portugal has been granted more time to get its deficit under 3% of GDP. It includes structural reforms on the spending side that are going in the right direction and, if fully implemented, are likely to succeed in bringing the deficit below 3% of GDP over the next few years. But consolidation will only be successful if all measures are implemented immediately and forcefully. The consolidation programme needs to be complemented by additional reforms to strengthen expenditure control and in particular to reform the general pension system. On the revenue side, further simplifying the tax system and refraining from revising the tax legislation from one year to the next, as has happened in recent years, would make the tax system easier to manage and would facilitate long-term decision-making by economic agents.

Series Statement

OECD Economics Department Working Papers, 1815-1973 ; no.489

Uniform Title

OECD Economics Department Working Papers, no.489.

Subject

• Economics
• Portugal

LCCN

10.1787/808167518411

OCLC

oecd-lib-004893

Author

Guichard, Stéphanie.

Title

The Fiscal Challenge in Portugal [electronic resource] / Stéphanie Guichard and Willi Leibfritz

Imprint

Paris : OECD Publishing, 2006.

Series

OECD Economics Department Working Papers, 1815-1973 ; no.489

OECD Economics Department Working Papers, 1815-1973 ; no.489.

Connect to:

http://dx.doi.org/10.1787/808167518411

Indexed Term

Economics

Portugal

Added Author

Leibfritz, Willi.

Other Standard Identifier

10.1787/808167518411 doi