Finance minister defends package in Brussels
Portugal’s PS government has roundly rejected criticism from all sides of the political spectrum over its €2.4 billion inflation support package.
It has even been ‘aided’ by the return of former Minister for Labour, Solidarity and Social Security José António Vieira da Silva to explain that the law he brought in to protect pensioners against inflation (the law the government is effectively riding a coach and horses through) has been rendered out of date… by inflation.
His explanation given in interview with SIC noticias was that the formula used was “thought up at a time when inflation was below 2%”.
Now that inflation is running at 9% (possibly due to go even higher) it is “out of step with the current reality”.
In Brussels today, finance minister Fernando Medina has been put through the wringer by opposition Euro MPs.
The PSD’s Lídia Pereira (European People’s Party) began by pointing out that by the end of the year, the government is expecting “an excess in tax revenue of between six and seven billion euros”. Subtracting the programme announced on Monday and ‘measures already implemented’, there is ‘around three billion euros left. “What does the government intend to do with three billion euros it never expected to collect?”
Ms Pereira suggested it should be used to “free up resources” when in fact it is “filling State coffers. So it is not a programme for families first, she said. “Sometimes it seems that the State comes first, and families last. For young people, zero – and for middle classes less than that. So, once again, it is the same people who will pay”.
Lídia Pereira also criticised the support given to pensioners, which she stressed “falls short” of what they would be entitled to “with the proper application of the law” (that its founder now says is out of step with reality…).
In short, Ms Pereira joined the queue of politicians accusing the government of “deceiving those who have worked and paid tax for a lifetime”.
On the ‘other side of political ideology’, left wing euro MP José Gusmão (Bloco de Esquerda/ Unitarian Left Group) said much the same. His ‘simple question’ being: “ if in a context of record tax revenue, in a context of economic growth, in a context of extraordinary bank profits, the government’s solution to support families is a definitive cut in pensions, how then does the strategy of this government differ from the strategy of the ‘troika’?”
Mr Medina did his best, insisting the package adopted by the government” is a programme that responds to the needs, effective in its solutions, comprehensive in the audiences it reaches and responsible from a financial point of view“.
In many ways, the government is between a rock and a hard place. It has to look like it is spending within its means because the country’s debt is one of the largest in Europe.
“We do not know how long we will have to deal with the effects of war, we have to preserve our ability to act,” stressed the finance minister, reaffirming Portugal’s firm commitment to meet the “targets it is bound by, in order to be prepared for the future”.
In Portugal this afternoon, the Council of Ministers will be deciding on Portugal’s plan to save energy this winter.
The meeting will be taking place against a backdrop in which around 40% of businesses are already facing an increase in gas costs of over 200%, and two thirds complain they have seen no benefits coming through from the government whatsoever…