CONSELHO CONSULTIVO - 29.ABR                       
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           (Author Participation)





http://videos.sapo.pt/65cu4IyEWIlainRyV2rf

CONSELHO CONSULTIVO - 22.ABR                       
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http://videos.sapo.pt/a0qAZ8wKNnbBbmhIi7Bi

	VARIAÇÕES MENSAIS
	MONTH CHANGE
Empréstimos de Outras Instituições Financeiras Monetárias a Particulares
Loans of Other Monetary Financial Institutions to Private Individuals
				Milhões de Euros
				Millions of Euros
Crédito		Concedido		Cobrança Duvidosa
Banking Credit	Installment Credit			Uncertain Collection
Habitação	JAN.16	97.500		2.520
Mortgage	FEV.16	97.269	-0,24%	2.543	0,90%
Consumo	JAN.16	12.128		1.134
Consumption	FEV.16	12.224	0,79%	1.136	0,18%
Outros Fins	JAN.16	9.286		1.409
Another Finality	FEV.16	9.328	0,45%	1.396	-0,92%
Total	JAN.16	118.913		5.063
Total	FEV.16	118.821	-0,08%	5.075	0,24%
Fonte: Boletim Estatístico do Banco de Portugal
Source: Portugal Central Bank

	VARIAÇÕES MENSAIS
	MONTH CHANGE
Empréstimos de Outras Instituições Financeiras Monetárias a Empresas Não Financeiras
Loans of Other Monetary Financial Institutions to Non-Financial Corporations
					Milhões de Euros
					Millions of Euros
EMPRESAS NÃO FINANCEIRAS (Variação Mensal)
	Crédito Concedido				Cobrança Duvidosa
	JAN.16	81.422			12.645
	FEV.16	81.115	-0,38%		12.909	2,09%
Fonte: Boletim Estatístico do Banco de Portugal
Source: Portugal Central Bank

CONSELHO CONSULTIVO - 15.ABR                       
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http://videos.sapo.pt/Qw1gmMcum5DqcYMIj9Fl

	VARIAÇÕES MENSAIS
	MONTH CHANGE
Empréstimos de Outras Instituições Financeiras Monetárias a Particulares
Loans of Other Monetary Financial Institutions to Private Individuals
				Milhões de Euros
				Millions of Euros
Crédito		Concedido		Cobrança Duvidosa
Banking Credit	Installment Credit			Uncertain Collection
Habitação	DEZ.15	97.706		2.480
Mortgage	JAN.16	97.493	-0,22%	2.513	1,31%
Consumo	DEZ.15	12.183		1.123
Consumption	JAN.16	12.128	-0,45%	1.134	0,98%
Outros Fins	DEZ.15	9.336		1.371
Another Finality	JAN.16	9.293	-0,46%	1.416	3,28%
Total	DEZ.15	119.224		4.974
Total	JAN.16	118.913	-0,26%	5.063	1,79%
Fonte: Boletim Estatístico do Banco de Portugal
Source: Portugal Central Bank

	VARIAÇÕES MENSAIS
	MONTH CHANGE
Empréstimos de Outras Instituições Financeiras Monetárias a Empresas Não Financeiras
Loans of Other Monetary Financial Institutions to Non-Financial Corporations
					Milhões de Euros
					Millions of Euros
EMPRESAS NÃO FINANCEIRAS (Variação Mensal)
	Crédito Concedido				Cobrança Duvidosa
	DEZ.15	81.566			12.589
	JAN.16	81.422	-0,18%		12.545	-0,35%
Fonte: Boletim Estatístico do Banco de Portugal
Source: Portugal Central Bank

CONSELHO CONSULTIVO - 8.ABR                       
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Participation of the President of ECB - Mario Draghi - in the Portuguese Council of State - him speech.

President of the Republic,
President of the Assembly of the Republic,
Prime Minister,
President of the Constitutional Court,
Honourable Members of the Council of State,
I am grateful for the opportunity to discuss with you today the state of the euro area and the changes that still lie ahead of us and I would like to thank the President of the Republic for inviting me.
On my way here I passed by the Tejo river and the tower of Belém. The place where five centuries ago the first maritime explorers set sail for often uncharted waters, looking for new opportunities.
Portugal and its people have also been going through uncharted waters and facing important challenges in recent years, as has the rest of Europe. During the past couple of years, economic headwinds have swept through Portugal and the euro area at large. However, we are seeing signs of recovery.
Nevertheless, important challenges remain as the euro area continues to be weighed down by low potential growth and high structural unemployment. In my remarks today, I will consider the state of the euro area recovery, the role of monetary policy and finally the steps needed to strengthen the euro area and the EU.

The state of the euro area

The euro area recovery is currently proceeding at a moderate pace. It is supported by our monetary policy measures and their impact on financial market conditions, as well as by the low price of energy. Yet, investment across the continent remains weak, as heightened uncertainties about the global economy and broader geopolitical risks are weighing on investor sentiment.
The recovery is also taking hold in Portugal: its economy is currently growing at the same pace as the euro area as a whole and unemployment is on a clear downward trend.
Yet, the signs of the euro area and Portuguese economic recovery should not be an indication that we can rest on our laurels. The euro area as a whole only just managed last year to return to the levels of economic activity seen before the crisis and some countries, among them Portugal, are still not there. And our economies are still marked by significant vulnerabilities which need to be swiftly addressed. One key issue in this respect is youth unemployment, as it prevents young people from playing a full and meaningful part in society. Indeed, despite being the best-educated generation ever, today’s young are paying a high price for the crisis. In Portugal, still now, around one-third of the young workforce is without job. This seriously harms the economy, because these people who are willing but unable to work are being prevented from developing their skills. To avoid creating a “lost generation” we need to act quickly.
Issues such as this illustrate clearly that the current economic recovery needs to be further supported by policymakers taking decisive action. In this respect, all actors need to play their role and European institutions must do so as well by delivering on the objectives that have been assigned to them as part of their mandates.
The ECB did not hesitate to act in this regard. To preserve price stability, we have adopted an accommodative monetary policy stance without precedent and the ECB has and will continue to do whatever is needed to comply with its mandate. We have solid evidence that the monetary policy measures that we have taken since mid-2014 are being effective in delivering their intended impact. We are finding that our policy measures have been instrumental in providing better financing conditions and addressing financial fragmentation across euro area countries. From May 2014 to February 2016, interest rates on loans declined significantly inside the euro area, when considering the average: by 92 basis points for non-financial corporations and by 72 basis points for households. The effect has been even stronger in Portugal, with bank lending rates for non-financial firms falling by nearly 200 basis points over the same horizon. For households rates came down by 125 basis points. The improved funding conditions for both firms and households are supporting the current recovery, facilitating job creation and affecting the inflation outlook.
However, our decisions have also helped to maintain trust in the single currency in times of financial instability and high uncertainty, as, among others, public confidence shows. According to Eurobarometer data, trust in the euro is virtually unchanged compared to its pre-crisis level. While doubts increased in Portugal at the beginning of the crisis, we even see a solid strengthening of trust in our common currency in the last couple of years, again suggesting that our monetary policy measures have been effective.
The measures we announced on 10 March 2016 will further contribute to achieving our aim of price stability. Of course, it will take time for these latest measures to start working their way through the economy and delivering their full benefits. Nevertheless, they constitute a substantial package which gives priority to loans for households and businesses, thus further supporting economic activity in the euro area. They underline our determination to fulfil the mandate entrusted to us, namely to bring inflation back to below, but close to, 2%. These measures also show we have no shortage of tools available.
However, the ECB cannot single-handedly create the conditions for a sustainable recovery in growth. Our policies can support a cyclical recovery, but they cannot by themselves remove structural impediments to growth. This requires a concerted effort in terms of economic and fiscal policies. In many countries of the euro area, current fiscal space to support growth is limited. We should avoid the fiscal rules being stretched to a point where they lose credibility. In the case of Portugal, we welcome the fact that the Commission found that the 2016 draft budgetary plan was not in particularly serious non-compliance with the provisions of the Stability and Growth Pact. And we welcome the commitments of the Portuguese authorities to prepare additional measures which could be implemented when needed to ensure compliance.
There is however scope for all countries to step up the efforts to make the composition of their tax structure and spending more growth-friendly and, among other things, to redirect public spending towards investment, research and education.
Regarding economic policies, without the active role of national governments and parliaments to steadily improve the competitiveness of the euro area economy, we will not be able to raise potential growth and reduce structural unemployment. And I would add that the conditions in recent years were never as supportive as they are today for jump-starting structural reforms that ease the way firms do business, improve productivity and lay the foundations for a more sustainable recovery.
All Member States of the euro area have already been working hard to reform their economies in the past few years. Portugal’s reform efforts were in this regard both remarkable and necessary. We now see clear signs that these remarkable efforts are paying off here and elsewhere. Just to name a few examples: buoyant employment growth since 2014 suggests that labour market reforms are making the economy more adaptable. The improved conditions for doing business or the reduced port operating costs are two out of a long list of measures which have enhanced the competitiveness of this country. Moreover, educational reforms are bearing fruit as well, with the rate of early school leavers having almost halved since 2009. However, all reforms take time to yield results. This is true for Member States across the Union, large and small.
There is no case for unravelling past reforms. In addition to upholding past achievements, further reform efforts are needed across the euro area, as outlined in the 2015 country-specific recommendations, which each year identify key objectives in tackling remaining vulnerabilities and rigidities. It is only through such reforms that we can avoid a build-up of new imbalances and bring growth rates back to levels that ensure prosperity and allow households and Member States to grow out of their debt.
Improving the functioning of the labour market remains key in this respect, with a view to ensuring a rapid adaptation to shocks or structural change. This area remains an important challenge in Portugal, as also mentioned in the 2015 country-specific recommendations. Taking further action is all the more important, with high unemployment, according to the latest Eurobarometer, being considered the main concern to the people of Portugal. But we also need reforms that encourage firms to invest. Investment raises both supply tomorrow and demand today. Such reforms include measures that further improve the business environment. However, investment could also be helped by addressing the corporate debt overhang. For instance, increasing the efficiency of debt restructuring tools could disburden still viable companies and thereby facilitate their investment plans.
The European Semester, in which these country-specific recommendations have been issued, should be a good framework to push for such a new effort. However, the country-specific reform recommendations, as just indicated by the Commission, have so far hardly or not at all been acted upon by Member States. Stepping up the reform momentum is therefore essential. In this respect, I have noted with great interest that you will be discussing the National Reform Programme later today. Indeed, greater ownership not only by national governments, but also by parliaments and bodies such as this one would be crucial for the European Semester to gain more traction and yield better results.

Making Economic and Monetary Union work in the long run

These are efforts that should be undertaken by countries individually. But there is also work to be done collectively. Most importantly, governments should work towards completing Economic and Monetary Union (EMU). EMU remains an incomplete construction. And while steps have been taken to strengthen the economic governance framework and to make our financial markets safer, this incompleteness amplified the effects of policy mistakes in the run-up to the crisis and continues to leave EMU fragile and its Member States vulnerable to shocks.
In principle, we know where the weak spots in our construction are. The Five Presidents’ Report provides a road map on how to correct them by way of risk reduction and risk sharing, both as regards the financial sector and as regards economic and fiscal policies.
It is now up to political leaders to fill this road map with life. I am aware that at the moment much of the political attention lies elsewhere. But we should not forget that a stable and sound economy is a vital precondition to be able to tackle challenges in all other policy areas; therefore, making EMU function in the long run is not a luxury – it is a necessity for Europe to flourish.
Thank you for your attention; I am now looking forward to our debate.

 





CONSELHO CONSULTIVO - 1.ABR                       
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IMF Executive Board Concludes Third Post-Program Monitoring with Portugal

On March 30, 2016, the Executive Board of the International Monetary Fund (IMF) concluded the third post-program monitoring¹ with Portugal.

Highly accommodative macroeconomic conditions have generated only modest growth in the presence of remaining structural impediments. In 2015, low interest rates, a weak euro, and low oil prices—noted in earlier staff reports—remained largely in place, allowing growth to reach 1.5 percent. As the consumption-driven recovery is losing momentum, however, GDP is projected to expand by only 1.4 percent this year and to moderate to 1.2 percent over the medium term.

Portugal appears to have missed the 2015 fiscal deficit target, and is expected to remain in the EU’s Excessive Deficit Procedure. Staff estimates a full-year deficit of 4.4 percent of GDP, compared to the budget target of 2.7 percent, implying a loosening of 0.5 percent of GDP in the structural primary terms. The deficit exceeded the budget plan despite larger-than-expected savings on interest and social expenditures (reflecting the fall in unemployment), as revenues fell well short of the authorities’ ambitious targets.

The banking system is hobbled by low profitability and poor asset quality, and required public support as recently as December 2015. At the same time, Portugal’s stock of corporate debt remains one of the highest in the EU, thereby precluding the allocation of credit to new productive sectors of the economy. On the structural side, the policy changes—already implemented or under consideration—imply at least a partial reversal of structural measures introduced during the Fund-supported program.

Executive Board Assessment
Executive Directors welcomed the successful stabilization of Portugal’s economy under the Fund-supported program which has paved the way for the ongoing recovery and a decline in unemployment. They noted, however, that significant challenges remain, particularly those arising from the high level of public and corporate debt, unresolved structural impediments, the need to raise the underlying growth potential, and from the uncertain global environment. Directors encouraged the authorities to build on the progress made thus far and to continue to pursue prudent policies and reforms to secure sustainability of public finances, maintain market confidence, address financial sector vulnerabilities, and boost competitiveness and potential growth.

Directors welcomed the authorities’ commitment to fiscal and debt sustainability and encouraged them to follow through with the adjustment process while supporting recovery. To guard against fiscal risks and to maintain market confidence, they highlighted the importance of developing contingency plans to ensure that the 2016 budget targets are met, rationalizing public spending to contain pressures from public wages and pensions, and maintaining fiscal buffers.

Directors noted that while Portugal’s banking system has made progress, further efforts are needed to strengthen bank balance sheets. They encouraged the authorities to build on past measures to improve bank profitability, asset quality, and governance. Maintaining confidence in the financial sector will require vigilance, a build-up of fiscal buffers, and greater transparency with regard to financial sector operations. Directors recommended a more comprehensive strategy to address nonperforming loans along with an ambitious approach to corporate debt workouts, noting that the debt overhang holds back the economy’s growth potential.

Directors emphasized that continued progress on structural reforms is critical to enhance medium-term growth prospects, employment, and income. They encouraged the authorities to keep making progress on labor market and public administration reforms, and avoid any perception of reversal of recent and complex reforms so as to maintain investor confidence and boost the economy’s growth potential.