EXPLANATORY MEMORANDUM

Upon a request by Portugal, the Council granted financial assistance to Portugal on 17 May 2011 (Council Implementing Decision 2011/344/EU) in support of a strong economic reform programme aiming at restoring confidence, enabling the return of the economy to sustainable growth, and safeguarding financial stability in Portugal, the euro area and the EU.

In line with Article 3(10) of Decision 2011/344/EU, the Commission, together with the International Monetary Fund (IMF) and in liaison with the European Central Bank (ECB), has conducted the eleventh review to assess the progress on the implementation of the agreed measures as well as their effectiveness and economic and social impact.

Taking into account of intervened information, by proposal [insert reference] the Commission has proposed to amend Decision 2011/344/EU.

An additional decision is necessary following the entry into force of the "two pack" (specifically, Regulation (EU) No 472/2013) which also disciplines how policy conditionality underpinning an economic adjustment programme is to be modified. Regulation (EU) No 472/2013 applies to existing macroeconomic adjustment programmes that are in place as of its entry into force which, as a consequence, requires that adjustments follow the Article 7(5) procedure.

2014/0102 (NLE)

Proposal for a

COUNCIL IMPLEMENTING DECISION

approving the update of the macroeconomic adjustment programme of Portugal

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) No 472/2013 of the European Parliament and of the Council of 21 May 2013 on the strengthening of economic and budgetary surveillance of Member States in the euro area experiencing or threatened with serious difficulties with respect to their financial stability[1], and in particular Article 7(5) thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1) Regulation (EU) No 472/2013 applies to Member States that are, at the time of its entry into force, already in receipt of financial assistance, including from the European Financial Stabilisation Mechanism (EFSM) and/or the European Financial Stability Facility (EFSF).

(2) Regulation (EU) No 472/2013 sets rules for the approval of macroeconomic adjustment programmes for Member States in receipt of such financial assistance, which must be applied in conjunction with Regulation (EU) No 407/2010[2] establishing the EFSM when the Member State concerned receives assistance both from the EFSM and from other sources.

(3) Portugal has been granted financial assistance both from the EFSM, by Implementing Decision 2011/344/EU[3] and from the EFSF.

(4) For reasons of consistency, the update of the macroeconomic adjustment programme for Portugal under Regulation (EU) No 472/2013 should be approved having reference to the relevant provisions of Implementing Decision 2011/344/EU.

(5) In line with Article 3(10) of Implementing Decision 2011/344/EU, the Commission, together with the International Monetary Fund and in liaison with the European Central Bank, has conducted an eleventh review to assess the progress made by the Portuguese authorities in implementing the agreed measures under the macroeconomic adjustment programme, as well as their effectiveness and economic and social impact. As a consequence of that review, some changes need to be made to the existing macroeconomic adjustment programme.

(6) Those changes are set out in the relevant provisions of Implementing Decision 2011/344/EU as amended by Council Implementing Decision 2014/[…]/EU of […][4],

HAS ADOPTED THIS DECISION:

Article 1

The measures laid down in Article 3(8) and (9) of Implementing Decision 2011/344/EU to be taken by Portugal as part of its macroeconomic adjustment programme are hereby approved.

Article 2

This Decision shall take effect on the day of its notification.

Article 3

This Decision is addressed to the Portuguese Republic.

Done at Brussels,

For the Council

The President

[1] OJ L 140, 27.5.2013, p. 1.

[2] Council Regulation (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation mechanism (OJ L 118, 12.5.2010, p. 1).

[3] Council Implementing Decision 2011/344/EU of 17 May 2011 on granting Union financial assistance to Portugal (OJ L 159, 17.6.2011, p. 88).

[4] OJ: please insert the number, the date and the OJ publication reference of the document.