Duque da Terceira.jpg

Portugal doing everything to resolve its insolvency

by CHRIS GRAEME [email protected]

Minister for the Economy Álvaro Santos Pereira has said that Portugal is taking all the necessary measures to fulfil the financial assistance agreement with the ‘troika’ without needing further bailouts.

However, addressing key business leaders at an American Chamber of Commerce in Portugal (AMCHAM) lunch, the minister admitted that there were “unexpected and unforeseeable circumstances, namely the international situation” that could force the Government’s hand.

On the possibility of Portugal needing to renegotiate its debts, the minister avoided making a clear and unequivocal statement on the situation but said that “Portugal was doing everything it needed to do in order to get out of the current situation” and was “doing its homework”.

But in a nod to Greece, he pointed out that not everything depended on the Government’s performance.

“There are unforeseen variables in all these questions, mainly in the international situation, but we’re doing our work,” he said, adding that the Portuguese economy was “also dependent on what was happening in the international economy.”

Álvaro Santos Pereira stressed that the Government was carrying out a “credible budgetary consolidation” as well as implementing a raft of reforms that were of the truly structural nature, ones that would enable Portugal to “return to economic growth and enjoy greater competitiveness”.

He said it was remarkable that the country was managing to carry out reforms “within a climate of overall agreement and consensus between the unions, company bosses, and the Government.”

As to the impact of the embargo on Iranian oil (Portugal is completely reliant on foreign imports for its fossil-based fuel), the minister admitted that there would certainly be a reaction in the price of crude oil but that it all depended on the how the situation developed.

Álvaro Santos Pereira also told the 200 Portuguese and American movers and shakers that the Government was completely committed to complying with the ‘troika’s’ financial assistance programme (bailout), and was focused on the structural reforms that were being carried out in employment, monopolies and licenses and justice.

He pointed to the social labour pact agreement between the various parties, government and unions at the end of January as an example of “a united front” and said that the business climate would only be improved by “eliminating obstacles that were getting in the way of economic growth.”

The minister also highlighted the “change in paradigm over insolvencies” that was intended through the ‘Revitalise’ programme, giving companies in difficulties a second opportunity to rationalise and make themselves competitive, rather than letting them die without “any chance of recovery.”

The Government wants to “give these companies time to be restructured, say two or three months, so that the State’s bodies such as the tax and social security offices, do not have to strip assets that could be important,” he concluded.

Click here to follow the Algarve Resident on facebook