LISBON (Reuters) - Portugal’s prime minister played down concerns on Wednesday that the country risks missing a bailout target if it is barred from using funds from an airport concession sale to cut its deficit.
Pedro Passos Coelho said the inclusion of around 1 billion euros ($1.28 billion) of proceeds from the sale of ANA airport management company had already been agreed with Portugal’s lenders who set this year’s deficit target at 5 percent of GDP.
Europe’s independent statistics agency Eurostat is still analyzing the issue. Privatization revenues cannot be used for deficit reduction, but ANA is to be sold off initially under concession terms, which the government insists qualifies the money for use in deficit cuts.
The sum is equivalent to some 0.6 percent of gross domestic product so without it the deficit would overshoot the target.
“This question of ANA in 2012 is already sealed from the point of view of the troika (of international lenders) and the Portuguese government,” Passos Coelho told reporters.
“If there is a future decision by the statistical bodies, namely Eurostat, that would force a revision of the deficit for this year, which is something I hope doesn’t happen ... it will come in its time in the future, but without retroactive effect, so to speak.”
He said alternative austerity measures to compensate for a potential slippage due to the ANA sale were “not worth discussing”.
Earlier on Wednesday, the European Commission said Portugal was taking measures to limit the 2012 deficit to 5 percent of GDP, but saw “downside risks to the fiscal projection” from how the statistical authorities view the airport concession sale.
($1 = 0.7840 euros)
Reporting by Andrei Khalip; Editing by Ruth Pitchford