THE European Commission’s call last week for a more positive fiscal stance in the euro area means the end of austerity in Europe but not the end of fiscal rules to keep deficits low, the EU economic and financial affairs commissioner said.

    “Our message is: countries that have fiscal space should use the resources to invest more,” Pierre Moscovici told a news briefing in Lisbon on Friday, after lauding Portugal for cutting the budget gap to levels that should see it out of the EU excessive deficit procedure this year.

    “Those who are confronted with high deficits should focus on meeting fiscal targets. In my view it is the end of austerity. But it is not the end of the rules and serious fiscal policies,” he said.

    Finance Minister Wolfgang Schaeuble has accused the Commission of overstepping its mandate and urged it to focus its energies on enforcing the EU’s fiscal rules.

    Moscovici, who was in Portugal to meet officials including Finance Minister Mario Centeno, said the country’s budget deficit should for the first time settle below the European threshold for excessive deficits of 3 percent of GDP. The Commission currently sees no need for additional fiscal tightening measures, he said.

    “Portugal is the best pupil. It is among those with the lowest risk of not meeting the targets... We’ve said explicitly that we don’t want new measures in Portugal unless certain risks materialize. And we hope they don’t.”

    The Portuguese economy expanded an unexpectedly strong 1.6 percent in the third quarter from a year earlier, thanks to rising exports. On Wednesday it received more good news when Brussels said it will not suspend EU cohesion funds for breaking budget rules last year, when the deficit was 4.4 percent.

    Centeno boasted his country’s highest growth rate in the eurozone in the third quarter and said the acceleration will help deficit reduction next year. The government expects the deficit to narrow to 1.6 percent of GDP next year from this year’s projected 2.4 percent.(SD-Agencies)