European Commission Projects Portugal Will Breach EU Fiscal Rules in 2027, Second Largest Deviation in Eurozone (eco.sapo.pt)

• EC projects cumulative deviation of 2.1% in net expenditure growth by 2027 after defense flexibility.
• Portugal's net expenditure growth estimated at 5.6% in 2027, far above 1.2% target.
• Only France has larger deviation (36.5%); Ireland has negative deviation (-4.1%).
• Analysis is part of European Semester, accounts for national defense safeguard clause.
• Portuguese fiscal space reduced without offensive measures.

"The European Commission's European Semester package forecasts that Portugal will exceed the allowable net expenditure growth limit in 2027, with a cumulative deviation of 2.1% after applying the defense spending flexibility. Net expenditure growth is projected at 5.6% in 2027 versus the agreed target of 1.2%. Portugal has the second highest deviation among Eurozone countries, behind France (36.5%) and ahead of Ireland (-4.1%). The warning comes despite Portugal's current surplus and debt reduction trajectory."