PM challenges ratings agencies to ‘do the right thing’

Pulling no punches, prime minister António Costa has been capitalising on Portugal’s increasing economic upturn by giving interviews dubbed as how “ignoring Germany paid-off”, and by stressing that ratings agencies will have to change the way they peg Portuguese investment “soon” if they want to remain credible.

Talking to German newspaper Handlesblatt, Costa affirmed that ending austerity was “fundamental” to restoring confidence to Portugal’s citizens and the economy.

“When our government took office, it encountered many ideological prejudices in both the media and European institutions”, he said. “But we demonstrated that we have found a new and better way to stabilize the country.

“Ending austerity was critical to strengthening the people’s confidence and the economy. Private investment has grown by more than 7 percent in the last year and is growing even faster now. Confidence is the key to the economy, and we have given that to the Portuguese – confidence in their country, their future and our ability to emerge from the crisis.

“No country can grow if you take money away from families and businesses”, he continued.

“I believe that the rating agencies did not expect the European Commission’s latest decision (to remove Portugal from the excessive deficit programme).

“I am confident that they will soon increase their ratings. They are all now realizing that our situation is much better than in 2011, when they issued these ratings. They will have to change their ratings if they want to remain credible”.

It was a wide-ranging interview which touched also on new French president Emmanuel Macron’s call for a European finance minister and a parliament for the euro zone.

Costa showed he was all for the idea, saying:

“We need a shared budget to finance a shared policy. And for a budget you need the right institutions”.

Indeed, Costa laid out his vision of the future, saying there should be “automatic mechanisms” that kick in “to cushion the negative effect of crises which affect countries in different ways, and also to avert crises”.

“I’m thinking, for example, of a European unemployment benefit, of completing the banking union by creating a joint deposit insurance and of a budget capacity that promotes convergence. The euro zone is unstable because of the growing differences between prosperous countries and those with problems”, he told his interviewer who described Portugal’s punchy PM as “a polite man whose face lights up when he smiles”.

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