We can’t protect everyone says Finance Minister

 In Economy, News, Public debt, Public Financing, Public Spending

Last week, addressing a group of hoteliers and hospitality sector leaders at a the annual AHRESP Congress (Associação da Hotelaria, Restauração e Similares de Portugal) a secretary of State appeared to not tow the government line by announcing that support funding for companies to meet spiralling energy bills was not sufficient.

The Secretary of State for Tourism, Commerce and Services, Rita Marques, said the €3Bn that the government had earmarked for companies was a help, but should have been 10, 20 or even 30% higher given some extremely energy-reliant companies were facing bills of up to 300% higher this winter.
It was a question that Essential Business put to the Portuguese Minister of Finance, Fernando Medina at a lunch organised by the International Club of Portugal (ICPT) on Tuesday at the Sheraton Lisboa and Spa hotel.
The Finance minister said that it would be an error for the Government to convey the idea that because of the crisis any government could protect everyone.
“It is not reasonable to fuel the idea that all can be protected given an inflation crisis of this size”, he told the 150 business leaders at the event.
In the current context, it is important to have balanced spending, and we should not spend money before we have the necessary resources to do so, because when you draw up financial support packages, you can’t then make (additional) expenses before you have the resources. If you go and do that then the Government can’t support the policy that is has been defending of getting the public deficit down”, he added.
One of the central economic planks of Portugal’s current budgetary policy is to reduce Portugal’s public debt, which by the end of August ad fallen back to 126.7% of GDP, making the country the third in the European Union with the greatest level of public debt reduction in 2022.
“We want to ensure that we achieve a significant reduction in public debt by the end of the year by getting it down to 120 of GDP and taking us off the podium of the three most indebted countries in the EU after Greece and Italy.
This he said would reinforce the credibility of the country overseas, particularly the international lending markets.
“In 2022 we will have a debt that is less than we had at the start of the pandemic, and will be one of the few countries to have achieved this”, said the minister stressing that the goal for the year and the next few years was to remove Portugal from the list of most indebted countries and place it among the ranks of the debt of the large economies such as France which is at 98.1%. (in terms of debt to GDP)
Fernando Medina also announced that the €125 promised for over 500,000 families would be transferred to people’s bank accounts from Thursday onwards. The cash aims to offset higher consumer energy bills expected from this month.