Portugal says EU budget doubts no big deal, to respond today

October 27, 2016 8:12 AM EDT

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LISBON (Reuters) - The European Commission's requests for clarification of Portugal's draft 2017 budget are few and a simple run-down of some revenue items, to be sent to Brussels today, should suffice, Finance Minister Mario Centeno said on Thursday.

The European Commission on Tuesday demanded clarification from seven euro zone countries, including Portugal, over their draft budgets. It did not express any particular concern about Portugal.

"We will respond by the end-of-the-day deadline. The measures that Brussels questions in the letter are very few and simply require clarifying revenue projections, which is what the government will do," Centeno told reporters.

"All this dialogue with Brussels has been done in a constructive fashion, and that remains our attitude," he added.

European commissioner for economic affairs, Pierre Moscovici, said on Wednesday that Portugal's draft budget appeared to match the EU fiscal rules, "but we need to know what concrete measures are planned to reach the structural goal".

The minority Socialist government has targeted a budget deficit reduction to 1.6 percent of gross domestic product next year from this year's estimated 2.4 percent, which encompasses a 0.6 percentage point cut in the structural deficit that excludes the economic cycle effect.

The administration, which is backed in parliament by two far left parties, has reversed many of the austerity measures of the previous center-right government, but vows to deliver on the country's European fiscal commitments nonetheless, despite slower-than-expected growth.

(Reporting By Andrei Khalip, editing by Axel Bugge and Richard Balmforth)



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