Portugal triggers EU budget safeguard clause over energy spending

Portugal is set to activate the European Union's budget safeguard clause, a move authorized by Brussels, to manage additional energy-related expenditures stemming from the current crisis. This allows the country to increase public spending beyond initial plans without being deemed in violation of the bloc's fiscal rules.

Finance Minister Joaquim Miranda Sarmento announced the decision, stating that the EU Commission understands the need for such an exemption, similar to one already in place for defence spending. He noted that Portugal is the fifth EU country providing the most energy support relative to its Gross Domestic Product (GDP), according to data from the IMF and the European Commission. This situation, he added, permits Portugal to maintain or even enhance its support measures, depending on geopolitical developments.

Sarmento also commented on the European Central Bank's recent interest rate hike, suggesting it was not absolutely necessary given the current economic climate and inflationary pressures. He acknowledged the ECB's mandate and independence but maintained his view that the central bank could have refrained from signaling such a move, highlighting the different context compared to the 2022 energy crisis.