Minister gives statement following ECB president’s remarks on inflation
Portugal’s top cabinet minister trod a fine line in diplomacy today, saying the government means to following a line of balance against inflation “with the maintenance of social support considered necessary”.
Mariana Vieira da Silva’s comments follow those of ECB president Christine Lagarde earlier this week in Sintra about the need for European governments “not to adopt new measures of financial support or wage increases so that inflation could be more rapidly reduced and not stimulated”, explains Lusa.
It was a message, in final analysis, of austerity – and as Ms Vieira da Silva said today austerity hasn’t worked in the past.
“In Portugal, in particular, there have been past experiences of what happens when people’s needs are not met”, she said.
“When that happens, life does not go well either from an economic point of view or from a budgetary point of view.”
It was a continuation in terms of messaging from the thoughts of President Marcelo yesterday, says Lusa, “Mariana Vieira da Silva refused to comment directly on the position taken by the president of the ECB”, but she showed Portugal’s government refuses to be led by the nose.
“It is up to this government, taking into account the economic and social context, to take the measures it considers necessary”, she said.
“So in 2022, we had measures of significant value – €5.7 billion, about 2.4% of Gross Domestic Product (GDP) – to respond to a crisis situation. What I can guarantee is that we will not stop having measures when we consider that they are necessary because there is a balance that must always be guaranteed. With the increase in the cost of living, people need to have decent living conditions”.
When asked if the government felt conditioned by the ECB’s position against new social support and salary increases, she said that Prime Minister António Costa “has already made it clear that important measures taken by the government will be maintained”.
“We are in a world context with various pressures and many players, including some international organisations. For the government, it is essential to have measures that seek to combat inflation, combat the rise in energy prices, protect the most vulnerable families and have measures aimed at the middle class”.
Speaking at the end of the latest meeting of the Council of Ministers, Ms Vieira da Silva said that when one looks at the inflation figures in Portugal and the generality of the economic and social indicators, the conclusion “is that the strategy has been right and appropriate.
“We will continue the work exactly as we have been doing”.
As to Ms Lagarde’s advice to governments to start withdrawing spending decreed to deal with the times of the fight against Covid-19 and inflation, she said the government “has defined measures with distinct calendars and deadlines (…) We have measures planned until the end of the year and others of a more structural nature, such as pensions and civil servants’ salaries. We always make an evaluation. We have not changed either the assumptions or the methodology in the way we have worked in terms of fighting inflation (…) If the government understood that it was time to withdraw support measures for families, it would have done so. But, from our point of view, the last year and three months imply a great focus on the most vulnerable families, on families with children and with low or medium-low incomes, so that they can make ends meet. This is the government’s policy”, she insisted.
According to Vieira da Silva, depending on the evolution of interest rates and inflation, the government “will analyse whether further measures are necessary”.
“That is what we always do. We present supplementary measures whenever we consider that an additional response is needed. That’s what having the right accounts and budgetary capacity is for,” the minister added, in what will have been one of the most welcome institutional responses of the day, if not the week.
Source material: LUSA
