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The Portuguese miracle follows in moments

by ace
The Portuguese miracle follows in moments

It won't happen, but Portugal could take the leap in the coming years. Contrary to what happened in the last crisis, the European institutions are ready to vigorously support the Member States most affected by the pandemic. Between the ECB's additional 750 billion public debt purchase program, and the European Commission's new plan for an economic recovery fund, at the same amount – albeit with the German Constitutional Court and some more skeptical governments to stomp their feet, but with the Franco-German axis tuned – it looks like there will be money. The problem is how and where we are going to spend it.

The trauma of the large public investment in the response to the last crisis, which contributed to almost double our public debt while some regime-friendly companies were billing their lives, is still very present in the memory of those who pay taxes. António Costa reinvented national politics with “contraption”, but he also promoted an ideological repositioning of the Socialist Party with Mário Centeno and his version of light austerity, a neo-austerity served with apparent relief from direct taxes that was soon unbalanced by the increase in indirect taxes, services essential public services to bread and water (and increasing in their failures), and public investment in historic lows. It was a washing of the party's face and soul that, three times, led the country to pre-bankruptcy, but it could hardly have been different: economic expansionism was, with our level of indebtedness, incompatible with European budgetary rules.

Now, with significant financial support from Brussels at a loss, the extension of the life insurance of Frankfurt and Mário Centeno out, the time of investment restraint and budgetary rigor may have its days numbered. Soon, it is likely that the Government will meet the conditions to return to being the old PS, turn on the tap and find its Lena Group, launch its School Park, make a luxury airport in Lisbon, park the TAP planes there partially or totally public – maybe even taking the TGV to Madrid or the third crossing of the Tagus from the drawer. Let us not underestimate them, because spending is on them, and a decade of deprivation in business politics, in crony capitalism, is an eternity.

The story could be different if we did not insist, in countercycling with the most prosperous European countries, on the election of socialist governments. In the coming years, if the proposal submitted by the European Commission is approved, we will receive, among other supports, around 15 billion non-repayable, which could be channeled towards a profound reform of our economy, with a reduction in taxes on companies and people, attracting investment and creating conditions to achieve significant economic growth, without which we will not come out of the social stagnation of the last few decades. Reduce the IRC in stages to 15% by 2023 and transform the IRS into a two-rate tax (15% and 27.5%, exempt from the first 700 € of monthly income), as the Liberal Initiative recently proposed in its Economic Recovery Plan and Civic (“PREC Liberal”), would be two accelerators of economic growth and social mobility that could be partly supported by the aforementioned European supports.

At the same time, we would have a historic opportunity to move forward with the always postponed reform of the State, bearing the costs inherent in the displacement and training of human resources, but also compensation for expendable employees and reinvesting part of that savings in what is essential to improve in our public services. For example, in Justice, which needs more means to be faster, and in Health, which does not have endless waiting lists and evolves to a mixed model – putting an end to the myth that public service can only be provided by the State – it also needs another budgetary allocation. The timeless argument of the detractors of any investee to reduce public expenditure is precisely the budgetary effort necessary to comply with acquired rights, referring to an uncertain future time, when conditions are met. That time could and should be now.

It won't be like that. This Government's lack of vision and ambition will perpetuate our reality of miserable triple-digit wages and small annual increases in the minimum wage, while the middle class languishes and many of our best young people emigrate. The glorious years of Costa and Centeno, in a favorable context, were reduced to a growth never exceeding 2.4% and about 80% of new jobs with salaries below 900 euros. Only those who are content with little can look with hope for the future.

The Portuguese miracle follows in moments with the new government popstar, the “paraminister” António Costa e Silva, who hurried to say in an interview that “the economy lacks more state” and designed a relaunch plan for the next ten years in just two days. Ronaldo goes out of finance, Messi comes in from the economy. And we, in the average level of life, will continue to be closer to the district.


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