There are two simple questions: was it really positive for the country to postpone the elections just to get the 2024 state budget approved by an outgoing government? And would it be so bad if the country experienced the first months of next year with an OE per two-tenths?
Eduardo Catroga, former finance minister, says this is always a political option, stating that he is in principle ‘opposed to the dissolution of parliament if there is a parliamentary majority. But in the current case, he adds that ‘the President of the Republic, as soon as the majority government took office, had said that the victory was not only for the Socialist Party, but for the leader of the party, Marcelo was essentially with linked: if there was a removal of António Costa, that is, as if I spoke at the time, or by choosing a European career, or by an extraordinary fact, as happened, the President of the Republic had to be consistent with the previously defined policy.
According to the economics professor, if Marcelo Rebelo de Sousa had chosen another alternative, such as living within the twelfths of the OE of 2023, “nothing would be catastrophic for the country”, especially because “on the major issues if it turns out that a new government with a new economic policy philosophy always has the possibility to prepare a revised budget”.
João Duque, economist and president of ISEG, has a different opinion, who believes that the application of twelfths in 2023 would be “very bad” and explains why. “The first semester will be complicated for Portuguese exports and companies, which are complaining of a very significant drop in orders, and the fight against inflation is starting to have its side effects. We are seeing a very significant drop in growth activity in the center of Europe and Portuguese companies are selling less and less. It is possible that tourism will mitigate this effect somewhat, but the significant drop in exports of goods will greatly reduce the exports of Portuguese women, who already think a lot about the national GDP.”
That said, the economist continues, in the absence of an updated budget, the country does not have “adequate instruments to face the new context of 2024, which is completely different from that of early 2023, and the budget that we have not been prepared for this year. “, is for another year, that is already over. João Duque emphasizes that OE2024 wants to combat the “bad news” of the coming year by stimulating consumption. How? “Increase people’s income by raising wages and also to lower the IRS,” he Therefore, it is better to have OE than management at twelfths.
For economist Francisco Louçã, there are two considerations to take into account. “If the budget is a continuation of the previously developed policy – as was in fact evidenced by the non-approval of the 2020 budget after the election incidents and the budget only came into force in June of that year – that is why it said the country in twelfth place for several months – there is (and has not been) any significant impact on the management of public accounts, nor on the perception of economic actors, nor on economic developments.’
“However, there is another reason here that is completely independent,” he points out: “It is that one of the parties is changing leadership.” Francisco Louçã emphasizes that it is Portuguese political tradition that, under these circumstances, the president respects the minimum deadlines for a congress to be held to elect a new party leadership. And he gives the background: “It happened like this when Guterres resigned and there were elections – and then Ferro Rodrigues replaced him – and therefore President Cavaco Silva did exactly the same thing at the time as Marcelo Rebelo de Sousa did now.”
In this case, in order not to trample on a party’s right to freely choose its leader – due to constitutional deadlines for scheduling elections – Louçã agrees to schedule the elections for March 10. But it is “for that reason, not for budgetary reasons, or for any other reason, but for an issue that I think has to do with respect for democratic life,” he emphasizes.
In conclusion, Eduardo Catroga emphasizes that, taking into account that this option of Marcelo Rebelo de Sousa is, in his opinion, purely political and that a management of twelfths would not be so catastrophic, this “ultimately favors the party that participates in the elections”. This, he explains, ‘to the extent that the budget has an electoral bias due to the distribution of the money from the taxes collected, very largely together with inflation, creating a surplus that the party running the power can now be used by making changes to the budget. left and right, to satisfy their electoral clientele,” emphasizes Eduardo Catroga.
The responses from the three economists were collected yesterday, on the sidelines of the ceremony and the launch of the book Stories within stories – 11 years of ISEGthat is told by the voice of alumni – from 95 to 20 years -, their experiences within this school.
A book that also contains texts by the journalist-author of this article, made extensive use of photos from the Diário de Notícias archive, and also from the newspaper The century, deposited in Torre do Tombo. Coordinating the work was Carlos Bastien, professor of history of economics at ISEG, who has now retired.
Source: DN
