What is the PFC – Public Finance Council?
The PFC – Public Finance Council is an independent body that monitors compliance with budgetary rules in Portugal and the sustainability of public finances.
It was created by national initiative in May 2011, at the end of the XI Legislature, in the 5th amendment to the Budgetary Framework Law.
It is one of the national budget watchdogs or fiscal watchdogs, and started its activity in February of 2012, with the mission of carrying out an independent evaluation on the consistency, compliance and sustainability of fiscal policy, promoting transparency to contribute to the quality of democracy and economic policy decisions and to the strengthening of the State’s financial credibility.
The PFC was created by article 3 of Law no. 22/2011, of May 20, which made the 5th amendment of the Law on Budgetary Framework (Law no. 91/2011, of August 20, republished by Law no. 41/2014 of 10 July).
Mission of PFC – Public Finance Council
The PFC – Public Finance Council’s mission is to carry out an independent evaluation on the coherence, the achievement of the defined objectives and the sustainability of public finances, while promoting transparency. In this way, the Public Finance Council should contribute to the quality of democracy and economic policy decisions, enhancing the financial credibility of the Portuguese Republic.
The mission is therefore oriented towards budgetary and financial effects in the present and future of policy and management decisions in the public sector. In this sense, the Public Finance Council differs from the specialized entities in the inspection and control of the management acts of the units that compose the public sector.
The Public Finance Council shall support the operation of public finance monitoring mechanisms to ensure a medium-term framework compatible with a sustainability path, while respecting the principles of transparency and comprehensiveness. This framework is one of the essential pillars for a stable macroeconomic environment, a necessary condition for strengthening the growth capacity of the Portuguese economy.
The attributions of the PFC – Public Finance Council
For the performance of its mission, the Statutes confer on the Public Finance Council the following attributions:
- Assess the macroeconomic scenarios adopted by the Government and the consistency of the budget projections with these scenarios;
- Evaluate compliance with established budgetary rules;
- Analyze the dynamics of the public debt and the evolution of its sustainability;
- Analyze the evolution of existing commitments, with particular emphasis on pension and health systems and public-private partnerships and concessions;
- Assess the financial situation of the autonomous regions and local authorities;
- Assess the economic and financial situation of the entities of the public sector business;
- Analyze fiscal expenditure;
- Monitor budget execution.
The budgetary framework law also gives to the Public Finance Council a decisive role in recognizing a significant deviation from the medium-term objective and the deviation correction mechanism (Articles 72b to 72d of the Budgetary Framework Act) , in line with the assessment of compliance with budgetary rules and in accordance with Community legislation.
Information Access
In order to carry out a rigorous analysis of public accounts, the Public Finance Council has the right to access all information of an economic and financial nature, with all public entities being obliged to provide this information, as well as any additional clarifications requested. If the necessary information is not provided, the Public Finance Council will have to disclose this fact publicly.
The independence
Independence is one of the central characteristics of the Public Finance Council, which acts independently in the performance of its functions under the law and by the statutes, and can not request or receive instructions from the Assembly of the Republic, the Government or any other public or private entities.
