Former finance minister João Leão believes that governing without parliamentary support creates a difficult situation equivalent to driving a car without brakes, and that such a situation, in which any measure can be approved, undermines public finances.
“Government in these conditions by a minority government, without any parliamentary support, with many parties in parliament, creates a very difficult situation, especially for public finances,” João Leão said in a joint interview with Antena 1 and Jornal de Negócios.
A former finance minister in one of António Costa’s governments says governing under such conditions is “almost like driving a car without brakes” and almost like having a country without a finance minister, “because he has no control over the decision-making process.” in parliament.”
Such a situation, where everything can be approved in parliament “uncontrolled and uncritically,” will ultimately “undermine public finances,” he emphasizes.
The question, he points out, is not whether these measures are good in themselves or whether people agree with them, but that anything that seems positive but unbalances the budget may be approved “because there is no one to say no.”
This situation, João Leão emphasizes, has no analogues in any other European country, representing a problem for the country and for the “consistency of solutions.”
Regarding the fact that the current Finance Minister Miranda Sarmento publicly highlighted that the budget balance moved from a surplus in the first two months of the year to a deficit in March, João Leão stresses that it is difficult to extrapolate the quarter publicly. summing up the year by acknowledging that there may have been some strategy on the government’s part to “control anger and make choices more manageable.”
“[Estes três meses não põem em causa] I wouldn’t necessarily say [a previsão de excedente] by 0.7%, but the forecast for account balance and surplus [no final do ano]”, he said, stressing that measures such as the former SCUT will only have an effect in 2025 due to the so-called brake law.
Thus, João Leão believes that there is still no need for a budget adjustment, as he believes that the current budget has room to accommodate measures such as the IRS cut. However, he admits that the government may agree to correct the OE for reasons of legitimacy, “if the approved budget changes significantly.”
However, the former finance minister warns that in the current parliamentary climate, approving the fix is ”extremely difficult” and risks being “completely distorted” because there will be no question of a brake law in the process.
As for the approval of the state budget for 2025, he predicts that this will be a “big challenge”, since there is a risk of its failure, although he admits that even in such a scenario this does not mean that it will be adopted. It is necessary to hold elections because the current state budget is quite flexible. “You can live” in 2025, he adds.
João Leão also points to the fact that the next OE requires taking into account the new budget rules of the European Union, which come into force in 2025 and which will begin to be discussed with the European Commission in July, considering that it is “very difficult” to accept a European agreement. The commission assumed expected spending in a 3% GDP growth scenario that still includes tax cuts.
Author: Lusa
Source: CM Jornal
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