Miguel A Lopes/ Lusa

Portugal is a country you can trust – PM in Germany

“One of few with political stability, committed to balancing its books”

Following a week of almost surreal crisis within his Cabinet, prime minister António Costa has told a group of German businessmen in Hanover that Portugal is one of the few countries with political stability; a country to be trusted, and one that is committed to balancing its books.

Mr Costa was addressing an event organised by the Luso-German Chamber of Commerce and Industry to celebrate the presence of Portugal at this year’s Hanover Industrial Fair – “one of the largest in the world”, according to Lusa.

In a 30-minute speech, he said that in spite of current international “difficulties”, Portugal was in an “ideal geographical position to be in the front line of digital transition”. The country is strongly focused on renewable energies, has “overcome its historic deficit in terms of qualifications” and has European Funds to apply with the PRR (Plan for Recovery and Resilience) and Portugal 2030.

“Beyond our geographic position, beyond our human capital, beyond our funding opportunities, the truth is we have an institutional, geopolitical and financial framework that can be an added factor of trust. Portugal has political stability, which few countries have”, he went on.

Portugal “will be the 4th safest country in the world”, he added (curiously, as Portugal only recently slipped to 6th place in the Global Peace Index) – and in times of war this is no small thing – and it has maintained a firm trajectory of consolidation in public finances”.

“Although the (Budgetary) Stability Pact has been suspended, last year we managed to stay below the 3% deficit threshold and this year we will certainly be below or at least very close to the objective of 1.9%”, he said.

Mr Costa even stressed that “despite the extraordinary support granted by the State to combat Covid-19, Portugal has managed to resume inversion of the weight of debt in GDP.

“We can confidently say we will arrive with a debt-to-GDP ratio of 100% by the end of this legislature”, he told his audience. “We can continue to maintain objectives even in this scenario of uncertainty that surrounds us, which is a very important factor of confidence. In this context ratings agencies have continued to improve their outlook on Portugal”.

The PM went on to point out that in terms of inflation, Portugal was “the 7th lowest in the eurozone, essentially because of one factor, which has to do with the intensity of use of renewable energies” – and he returned again to the “competitive advantages” of Portugal’s “qualifications” and “human capital”.

“Today we have human capital”. The heaviest weight “which had to do with qualifications (…) is a burden younger generations no longer have to support”, he insisted. Instead there are “a trajectory of growth, opportunities from the energy point of view, digital connectivity”, in short, a combination of reasons for Portugal to be “an effective partner in the repositioning of chains of value in Europe”.

National media outlets are reporting the speech without referring to the admission only days ago by the head of the commission accompanying application of Brussels’ recovery and resilience funding that without foreign immigrant workers and a programme of reskilling Portugal’s resident population is actually “manifestly insufficient” to respond to all the projects that have to be implemented.

natasha.donn@portugalresident.com