EU's Moscovici has not pushed for new budget measures in Lisbon
LISBON (Reuters) - The European Commission has not discussed any additional budget measures with the new Portuguese government and will make a careful evaluation of its economic policies in May as scheduled, the EU commissioner for economic affairs said on Thursday.
After meeting Portuguese Finance Minister Mario Centeno in Lisbon, Pierre Moscovici told reporters the discussions on the budget were ongoing and constructive, but the Commission was not pushing for any new steps just yet as the economy was growing and unemployment declining.
"No, we did not discuss any other measures, or specific measures. ... We will need to assess (Portugal's policies) carefully in May," he said.
In an apparent recognition of a delicate political arrangement allowing the minority Socialist government to rule backed by the two far-left parties in parliament, Moscovici also promised that the Commission "does not want to interfere with Portuguese policy decisions", but will advise the cabinet.
The Socialists came to power in November promising to reverse austerity policies of the previous centre-right administration while respecting the country's European commitments. Analysts say a hard EU push for deficit cuts could undermine the moderate government's support in parliament.
Last month, the European Union already forced Lisbon to add new tax raising measures to its original budget plans in order to cut the deficit further, but told the government it had to stand ready with further measures if required as the budget still risked breaking EU fiscal rules.
Lisbon has argued that new measures will not be needed.
Moscovici said he aimed to "take forward the useful and constructive dialogue that is the characteristic of our relationship up to now", and which facilitated last month's approval of the draft budget by the Commission.
Fiscal concerns have been a key reason why Portugal was singled out by investors as a weak link within the euro zone during a sharp sell-off of risky assets in February, which brought back memories of the bloc's debt crisis.
Portugal's bonds have since recovered, but are still lower than where they started the year.
(Reporting by Sergio Goncalves and Shrikesh Laxmidas; Writing by Andrei Khalip,; Editing by Axel Bugge and Alison Williams)
