3.12.2013 Official Journal of the European Union L 32231 DECISIONS COUNCIL IMPLEMENTING DECISION of 19 November 2013 amending Implementing Decision 2011/344/EU on granting Union financial assistance to Portugal (2013/703/EV) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, Having regard to Council Regulation (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation mechanism ('), and in particular Article 3(2) thereof, Having regard to the proposal from the European Commission, Whereas: 1 The Council granted financial assistance to Portugal, at the latter's request, on 17 May 2011 by means of Council Implementing Decision 2011/344/EU (). Such financial assistance was granted in support of a strong economic and financial reform programme (the Pro- gramme’) which aims to restore confidence, enable the return of the economy to sustainable growth, and safeguard financial stability in Portugal, the euro area and the Union. In line with Article 3(10) of Implementing Decision 2011/344[EU, the Commission, together with the Inter- national Monetary Fund (IMF) and in liaison with the European Central Bank (ECB), has conducted, between 16 September and 3 October 2013, the combined eighth and ninth reviews of the Portuguese authorities’ progress on the implementation of the agreed measures under the Programme. Quarterly real gross domestic product (GDP) growth returned into positive territory in the second quarter of this year and short-term indicators also point to a progressive bottoming out of the recession. Real GDP is expected to contract by 1,8 % this year and to grow by 0,8% and 1,5% in 2014 and 2015, respectively. Tensions in the labour market are expected to ease () OJ L 118, 12.5.2010, p. 1. (%) Council Implementing Decision 2011/344[EU of 17 May 2011 on granting Union financial assistance to Portugal (O] L 159, 17.6.2011, p. 88). () somewhat. Still, the unemployment rate is expected to peak at 17,7 % next year before starting to decrease progressively. Uncertainties with regard to the macro- economic outlook are high as the sustainability of the projected recovery in 2014 and 2015 is contingent on positive trade and financial market developments, which remain fragile. Up to August 2013 the government cash deficit recorded an improvement of 0,6 percentage points of GDP (net of extraordinary factors) compared with the same period of the preceding year. Solid tax revenue performance and tight execution of most expenditure items are supporting the budgetary execution. However, some deviations have been identified with respect to the fiscal outlook of the seventh review of the Portuguese authorities' progress on the implementation of the agreed measures under the Programme (‘seventh review’). These deviations include shortfalls related to the reprogramming of Union funds and the postponement of the sale of a port concession (one-offs) and other factors, such as the higher than expected contribution to the Union budget, the under- performance of some non-tax revenue, the transfer to Greece of dividends from Greek bonds holdings in Banco de Portugal's investment portfolio, the lower than expected social contributions to the public employees’ pension scheme and overruns in the wage bill and intermediate consumption. After the use of the provisional budget allocations (0,3 % of GDP), the net effect of the deviations is estimated to increase the 2013 deficit by 0,5% of GDP. In addition, a capital injection into BANIF — Banco Internacional do Funchal, SA amounting to 0,4 % of GDP also increased the budget gap although this operation should not be considered for Programme purposes. The Government is taking corrective measures to ensure attainment of the 5,5% of GDP programme deficit target, in particular through the reduction of available funds for investment and tighter control on the inter- mediate consumption of line ministries (0,1 % of GDP). In addition, the Government announced a one-off tax- and-social-security-contributions debt recovery scheme, which is expected to recover revenue of about 0,4 % of GDP and is accompanied by increased sanctions for criminal tax offenders.