Portugal risks getting into trouble with the EU in the spring

Portugal is at risk of violating European rules for spending control and being subject to an assessment.

Portugal could face a budget deviation higher than allowed by European rules, risking being the target of a formal assessment by the European Commission that could culminate in the opening of an Excessive Deficit Procedure (EDP).

The conclusion results from the projections released by Brussels in the Autumn Package, which point to a failure to comply with agreed limits for the so-called “control account” of expenditure, says .

In the new European budgetary framework, Member States commit to multi-annual expenditure variation trajectories, which cannot exceed 0.3% of GDP per yearat a cumulative maximum of 0.6%. Portugal appears among the countries that are expected to exceed these limits in the first year of the structural plans’ validity, with an estimated deviation of 0.7% of GDP in both 2025 and 2026.

If these figures are confirmed by the National Statistics Institute at the end of March 2026, the European Commission will be obliged to draw up a report under Article 126 of the Treaty on the Functioning of the European Union. This document is the first step of an in-depth analysis aimed at verifying whether the country meets the debt criterion — mandatory for States with ratios above 60% of GDP — and can lead to the opening of a debt-based PDE, even without the existence of an excessive deficit.

Even so, in evaluating the Portuguese budget project for 2026, Brussels did not identify signs of indiscipline that would justify an immediate determination of non-compliance. The Commission highlighted that Portugal maintains a budgetary situation “close to balance”, estimating zero balance in 2024 and a deficit of 0.3% of GDP in 2026.

The accumulated deviation is explained not only by the projection for 2025, but also by the evolution of 2024, already incorporated in the methodology. In 2023, trajectories for 2025-2028 were set, based on the budgetary performance forecast for 2024. However, the Portuguese expenditure turned out to be higher than expectedcausing a deviation of 0.5% of GDP that is automatically transferred to the control account. For 2025, an additional increase of 0.3% is expected, although a tenth will result from increased spending on Defense, an expense that was temporarily excepted until 2028.