Listening to the public interventions of the candidates for the leadership of the Socialist Party (PS) and reading their motions, presented at the beginning of the month, is reminiscent of Rui Veloso’s famous song The First Kiss, whose chorus repeats: “ It is much more that unites us than what divides us”. This is also the path indicated by Pedro Nuno Santos (PNS) and José Luís Carneiro (JLC), who are running today for the right to vote, the date being set for the start of the XXIV National Congress of the PS, which ends on Saturday, December 16. There will be two days of internal struggle for the place of the future candidate for prime minister in the parliamentary elections scheduled for March 10, 2024, and time for everyone to show what he or she represents.
Despite their outspoken personalities and public images, the premise of their proposals is generally the same, as are the defined priorities. Economic growth, employment, decent work and better wages, more housing and more investments in healthcare are the banners of the two main candidacies, which also converge in praising the path followed by António Costa’s governments over the past eight years. However, the policies and formulas to achieve these goals are less convergent, with Pedro Nuno Santos following a path that strengthens the role and intervention of the state, while José Luís Carneiro directs his strategy towards a greater balance between public and private.

National debt and taxes

The view on how to deal with the national debt is perhaps the biggest difference between the two candidates, despite both defending the importance of the ‘legacy’ of clear accounts left by António Costa. PNS defends a balance between debt reduction, public investment and economic stimulus, stating that “a budget surplus policy accelerates the reduction of public debt, but can excessively reduce the fiscal space that the government needs to invest in public infrastructure and public services, and to and support companies”. The candidate therefore defends a discussion about the pace of this decline, a position very different from the position expressed in 2011, when he said: “The Germans are doing well, otherwise pay we don’t”, arguing that Portugal should impose itself regarding the required payment terms. by European partners.

JLC’s vision is that “it was and will remain possible to guarantee budget balance without endangering growth and investment” and thus reduce the burden of public debt, guaranteeing a “safe haven” for the Portuguese economy , in a scenario of international The motion also explicitly criticizes the opponent by saying that “not understanding the need to reduce public debt is equivalent to not understanding the risk posed to the Portuguese economy, companies and families rest.”

From the perspective of the economist João Duque, José Luís Carneiro is right to choose a path that maintains investment while reducing current expenditures to converge debt, since debt is an excess and a problem that removes room for maneuver in times when we might need them.” That’s how it was during the Covid pandemic, he recalls, and that’s how it will be if a scenario of economic crisis worsens, compromising the state’s ability to support businesses and the economy taken away.

According to Manuel Caldeira Cabral, university professor and former Minister of Economy of a socialist government, the two candidates must maintain the straight line of accounting between 2015 and 2018. It does not seem to me that there is a very large gap, either in the speech or in the motions. Pedro Nuno Santos, in a context of positive balance, admits some flexibility, but within the idea of ​​a balanced balance of public accounts,” emphasizes Caldeira Cabral, who considers herself independent, although sympathetic to the PS.

But the former ruler insists that “what is more important is how the candidates position themselves on economic issues that go beyond public finances.” And on this issue, he believes, each of the candidates is putting “more emphasis on some areas in which they may have more experience.” José Luís Carneiro in the internationalization of the economy, and Pedro Nuno Santos in supporting business innovation. The first was Secretary of State for Portuguese Communities and Caldeira Cabral emphasized “the strong economic dimension that he placed in the relationship with communities, where there are Portuguese, in France, the United States or Canada, with great economic power”, in an effort to attract investments Pull. to Portugal.

Pedro Nuno Santos is committed to “strengthening support for companies, which is in no way contrary to left-wing politics,” the former governor emphasizes. In fact, Caldeira Cabral says that support for business innovation has been strongly emphasized by the PNS in its leadership campaign, an area “that has stood out a lot in the PS’s economic policy in recent years, with technological centers, an increase in the number of patents, support for startups, with fiscal policy”.

For Paulo Coimbra, researcher at the Observatory and Alternative Crises at the University of Coimbra, the issue of debt must be put into perspective. “Here the diagnosis cannot be a contest between two candidates, one saying: ‘I am honest’, the other saying: ‘I am more honest’, or ‘I am a man of the state’ and ‘I am more a man of the state’. the state”. For the state, its first duty is to ensure that the economy as a whole is viable and not to become obsessed with its own financial balance of families, and this is really important because it is the most vulnerable link.”

In this matter, he argues that “Pedro Nuno Santos is much better prepared, and when he now says that it was an unfortunate formulation that made the legs of the Germans tremble in 2011, he participates in this institutionalized practice in the power conflict. countries like Portugal, according to the principle that it is necessary to capture the center and thereby moderate the discourse,” he states. But I don’t think Pedro Nuno Santos said what he said in 2011 by chance. He shows that he is a candidate who understands much better the challenge facing the country, namely the challenge of balancing a country’s external accounts. A state that bears the costs of permanent investments that create a deficit situation for itself, but that create the conditions to meet the challenge of the private sector, and which seems to me much better prepared for this fight,” he adds to.
In the field of taxes, PNS states that reducing the IRS will not benefit almost half of Portuguese who have no taxable income and is therefore focusing on reducing VAT and other indirect taxes. “It would be important to study ways to reduce the indirect taxes that have the most impact on the disposable income of the lowest-income families,” the motion said. A proposal that, according to João Duque, “makes no sense, since reducing indirect taxes is a way to favor the better off,” he told DN.
JLC is already targeting the IRS and is proposing the reinstatement of the IRS tax deduction for interest expenses as a measure to support families with regard to credit growth. This proposal is more in line with the policy of the outgoing government.

Bring the income closer to that of our brothers

Stimulating economic growth by raising wages is a theme shared by both candidates. However, PNS defends the minimum wage increase in a multi-year perspective, together with “strengthening collective bargaining and investing in qualifications”. JLC presents an approach that, from João Duque’s perspective, is “interesting” and aims to reduce the gap with the minimum wage in Spain over the next four years. Please note that you currently pay 760 euros in Portugal and 1080 euros in the neighboring country, a difference of approximately 300 euros. “It could be a motivating formula to compare with the market closest to ours and with which we have strong commercial relations,” the economist said.
Regarding the salaries of civil servants, both candidates defend the valorization of careers and reward schemes, with JLC leaving a vaguer idea on the subject of recovering teachers’ service time, saying only that it is committed to renewing social coordination agreements in the areas of salaries and competitiveness, and the agreements with the public administration unions on remuneration”. PNS is clearer when it says that it is necessary to “renegotiate with the associations representing teachers the rules regarding seniority”.
The two recognize that only with more attractive salaries will it be possible to attract and retain the best talents in public administration, and also emphasize the importance of technology in the service of more efficient management of public resources – human and material.
Manuel Caldeira Cabral highlights the “more centrist positioning of JLC, and more left – with solutions more linked to the state – of the PNS, infamous in the campaign”, but believes that both candidates with whom he crossed paths and worked together when he was in government, as Minister of Economic Affairs, “being able to take action on a very wide range of issues”. With car