JUSTIÇA DE SÃO PAULO DETERMINA QUE O MUNICIPIO AUTORIZE A EXPEDIÇÃO DE NOTAS FISCAIS ELETRÔNICAS.
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18 de abril de 2024Spain and Portugal need additional budget cuts to meet deficit targets announced a month ago even as their efforts to tame their shortfalls threaten to choke growth and produce a “snowball” effect on their debt levels, according to a draft European Commission document.
The deficit reduction measures announced by the two countries as part of a European Union agreement on May 10 to create a 750 billion-euro ($920 billion) financial backstop for indebted countries aren’t sufficient, the report obtained by Bloomberg News said. Spain pledged to cut the EU’s third-highest deficit to 9.3 percent of gross domestic product this year and 6 percent in 2011. Portugal said it would reduce its shortfall to 7.3 percent of GDP in 2010 and 4.6 percent in 2011.
“While the newly announced measures are significant and the targets imply impressive budgetary consolidation, more measures are needed to meet those targets, in particular for 2011,” according to the draft report, which is dated May 26. The document, titled “Consolidation Requirement in Spain and Portugal” was prepared by the European Commission for EU finance ministers.
The commission is set to release a public report today on efforts by 12 EU countries, including Spain and Portugal, to control their budget deficits.
Portugal will need additional measures worth 0.3 percent of GDP this year and at least 1.5 percent next year to meet their May 13 deficit goals, the commission document says. Spain could meet this year’s target with only “marginal” adjustments and will have to cut at least 1.75 percent of GDP next year to meet its targets.
Austerity Measures
The EU praised Portugal and Spain’s efforts to cut their budget shortfalls, while warning that the austerity measures needed to trim the deficit are taking place in “adverse context of low GDP growth, poor competitiveness, stable or declining prices and wages and high real interest rates. These conditions result in a high ‘snowball’ effect on the government debt.”
The report says that the yield premiums investors demand to buy the countries’ benchmark bonds instead of comparable German debt “remain high” and deficit reductions efforts are “daunting.”