Fernando Medina

Finance minister rejects EU indication to increase salaries

“Increases are not necessary” – Fernando Medina

Portugal’s finance minister Fernando Medina has rejected an indication from the EU to increase public sector salaries for a second time this year, saying “Portugal’s current policy over salaries is adequate to respond to the necessity of assuring spending power during 2023”.

The minister was talking in the context of a meeting of ECOFIN, the Council of EU finance ministers, in Brussels yesterday which “assumed that Member States should support a salarial evolution that meets the loss of workers’ purchasing power, particularly that of the lowest paid” due to the current situation of “elevated inflation” in the eurozone.

Mr Medina however is more concerned with not contributing to what he calls “an increase in inflationists tensions in our country”, and retaining the strategy in place for reducing Portugal’s deficit – still one of the highest in the eurozone.

Thus, while the European Commission “defends there is margin to increase salaries this year”, Portugal doesn’t. 

But Mr Medina has intimated, in the face of criticism from public sector syndicates, that he could review the form in which salaries are being taxed.

This is the promise at least today.

Another ‘indication’ coming from the ECOFIN meeting in Brussels was that “where necessary, social support systems to help vulnerable households cope with energy shock and the green and digital transition, addressing the increased risk of poverty” should be developed and/ or adapted.