Pedro Nuno Santos did the math and concluded: if there had not been a rush to reduce the public debt and improve the state’s budget balance, the government of which he has no longer been a part since January would have been able to do so with the budget for next year (OE2024), deployed economy plus 4.4 billion euros. He said it on Monday evening on SIC-Notícias, in the second edition of the new weekly political commentary section.
After avoiding a week ago to respond critically to the government’s bill – which had just been introduced in Parliament – the former Minister of Infrastructure and Housing left on Monday evening with a cold shoulder.
“It was clearly possible to do something different, by continuing to follow the debt reduction path presented in the Stability Programme. It is a distraction of 4.4 billion euros that does not reach the economy.”
As he said, “It was clearly possible to do things differently.” And ‘doing differently’ would mean ‘meeting the debt reduction path presented in the Stability Program in the long term’ (it was established that this would fall to 103% of GDP in 2024, but the government decided that there was room is to do this). eventually dropping to 98.9%).
And furthermore, he also said, ‘doing differently’ could also have consisted of not wanting to forcefully convert the government deficit forecast for this year (0.9% of GDP) into a positive balance of 0.8% .
Calm ‘warring’ sectors
This – he explained – “is a distraction of 4.4 billion euros that does not reach the economy”. And that they could represent “a very important margin”, even if only “partially”, to “resolve problems in public administration”, since it is “fundamental that the government can make peace with professional groups that in war,” such as doctors or teachers. “We can invest in health care by making the careers of doctors dignified” and “the state must understand that it has to pay to attract and retain teachers,” said the former minister who is now only a PS deputy (but between one and another is still seen as a putative candidate to succeed António Costa as leader of the PS).
‘It is a mistake to think that at a time when the country is growing strongly and the conditions for a balanced budget exist [positivos] Not collecting this positive result to be able to cope with the less good seasons.”
In Luxembourg, after another Ecofin meeting, the Minister of Finance – also seen in the PS as one of the candidates to succeed the current leader – responded.
Store carefully
It is true that he did not present his statements in response to his PS comrade (nor was he questioned about them). However, what he said, presented as the Portuguese perfective in the ongoing debates in the EU on the budgetary discipline required of Member States, objectively constitutes a response to the kind of criticism leveled by Pedro Nuno Santos.
Fernando Medina said that “especially in countries with high debts” it is a mistake to think that at a time when the country is growing strongly and economic conditions […] not to achieve this positive result in order to cope with “the less good times”.
In other words, it is important to apply ‘countercyclical rules’ in fiscal policy: ‘When an economy is growing, it is time that the state can have neutral or positive balances, as is happening now in our country’ and then it is a matter of ‘making cuts during times of higher growth’, so that ‘when there are times of very low growth or recession, there can be room to generate budget deficits that soften the impact.’
Without mentioning Pedro Nuno Santos by name – whose criticism is actually supported by the PCP, BE and even the PSD – the Finance Minister has refuted their arguments. It remains to be seen how this debate will develop in Parliament this Wednesday.
Source: DN
