EN Official Journal of the European Union CE 33/121

(2004/C 33 E/121)

WRITTEN QUESTION E-1462/03

by Joaquim Miranda (GUE/NGL) to the Commission

(29 April 2003)

Subject: Social situation in Portugal and Stability and Growth Pact

According to figures published this week by the Union's Statistical Office, over a fifth of the Portuguese population were threatened with poverty in 1999. Portugal thus has the highest poverty rate in the Union, 21 %, a figure that would increase to 27 % if there were no state welfare benefits (unemployment benefit and guaranteed minimum income).

This week the Commission has also predicted that unemployment in Portugal will rise by approximately 27,5 % in 2003, giving an unemployment rate of 6,5 % at the end of the year, and continue to worsen in 2004, when the number out of work will total 390 000. Furthermore, Portugal is unquestionably going through an economic recession and in 2003 will not meet the Government's initial growth forecast of 1,3 %. According to very recent IMF figures, its economic development in the period from 2002 to 2004 will be the weakest in the Union, with all the social consequences which that will entail.

However, and still within the same week, the Commission has called for strict compliance with the Stability and Growth Pact and, despite the disastrous social scenarios referred to above, recommended that spending in areas such as education, health, and social security be cut as a matter of priority.

The Commission:

1. Does it not believe that the present circumstances and the related prospects for change are profoundly and seriously at odds with the socially harmful measures being proposed?

2. Which is a matter of greater concern to the Commission, rising unemployment and deepening poverty in a Member State or the trend recorded in that Member State in a financial indicator of one kind or another, a trend undoubtedly determined, moreover, entirely without regard to scientific principles and based on economic projections which have not been fulfilled and which monetarist policies themselves have contrived to make impracticable?

3. To what extent can the Stability and Growth Pact be considered an article of faith, given its known adverse effects on growth, cohesion, and the social sphere? Does the Commission have any intention of proposing to the Council that the pact be made more flexible, revised, or suspended?

Answer given by Mr Solbes Mira on behalf of the Commission

(6 June 2003)

1. The Commission does not believe that a framework geared to economic stability, of which the Stability and Growth Pact is a central piece, is in any way at odds with the attainment of social objectives. On the contrary, it is precisely the absence of macroeconomic stability that can eventually jeopardise the attainment of social objectives.

2. The Honourable Member can be assured that unemployment and poverty are matters of great concern to the Commission. What matters for the achievement of full employment and prosperity is a sustained high rate of economic growth. The latter can only be established on the basis of conditions of stability as far as prices, public finances and the external account are concerned.