Day after ECB boss claims they will lead to ‘more persistent inflation’
The leader of Portugal’s largest opposition party, PSD, said today that Portugal has to “risk paying better wages”, both in public administration and companies.
It was a message diametrically opposed to that given by ECB president Christine Lagarde in Sintra yesterday, suggesting any push by working people to recover lost purchasing power with improved wages should be repelled.
Ms Lagarde’s message about wages has already inflamed habitual commentators (see below).
Today, Luís Montenegro added his alternative viewpoint to the melting pot.
“In Portugal, we have to take a risk with a wage policy to value those who work in public administration and in companies,” he told a breakfast gathering hosted by the American Chamber of Commerce in Portugal at a hotel in Lisbon.
In a speech lasting over 40 minutes – and in which questions from the audience were closed to the media – Montenegro said he did not want to discourage anyone from investing in Portugal with the criticisms he made about the national situation – and once again pointed to demography as the country’s “most relevant problem”, which he considers to be “neglected by the political power”.
In addition to measures to remove obstacles to the birth rate (including low salaries/ high taxation and so much else in between) and to retain young people in Portugal (by offering better opportunities, less taxation and so much else in between), the Social Democrat leader once again advocated a policy of attracting immigrants, whom he referred to as “new Portuguese“.
“It is as essential that we have the capacity to attract and welcome people of other origins as it is to treat them well, to give them dignified conditions“, he said, saying that this is what he means when he talks about “immigration with rules“.
Montenegro believes “we must have the courage” to channel part of the financial resources of the budget for this purpose.
“We have to solve the problems of people who are born and live here, but we have to be able to do both at the same time”, he said, pointing one priority as the attraction of young students and entire families, two groups that he considers to have easier integration in the country.
Curiously, in the UK pressures now are on policies that do not allow foreign students to bring entire families with them, due to the country’s massive overcrowding, and financial commitments to foreign immigrants.
Political commentator slams Lagarde’s attitude to salaries
Television commentator, political journalist José Gomes Ferreira reacted with palpable frustration to the message from ECB president Christine Lagarde that inflation should be ‘brought down’ at the cost of salary increases.
Indeed he dubbed her speech as one from “someone who has no sensitivity about anything”, certainly no “social sensitivity”.
But what Gomes Ferreira also did was put Ms Lagarde into stark perspective: she is not only someone who has no sensitivity about anything; she is someone who has not been voted into her role, but is being allowed to “decide the future of 400 million people in Europe”.
Politicians, even the media, seem to hold her in some esteem, he said.
Yet, she is has been wrong (about inflation) in the past – and one of the overriding reasons economies are facing rampant inflation right now is down to the ECB’s years of dogged ‘quantitative easing’ (the printing of money) which it did ostensibly to “save the banks from the financial crisis of 2007 and 2008”.
Aside from ripping into the policy ideas of a woman whom he describes as “a bureaucrat”, José Gomes Ferreira stressed that one of the most depressing aspects of this situation is that countries which are not under financial assistance (countries like Portugal, in other words) “can raise their voices” against the ECB which, in final analysis, is advocating a course of action that cannot help fragile economies (like Portugal’s) – but they don’t appear to be doing this. Certainly, prime minister Costa has said nothing, he said.
Gomes Ferreira warns that all it will take now is for the PS government to start withdrawing social support measures currently in place, and/ or reinstating its fuel surcharge on petrol and diesel, and families will be back “suffering the consequences” – or, put another way, back suffering even further negative consequences of the European Central Bank’s misguided financial policies than they already are.