(in update)
“It was eight years in which we had to face multiple crises and resolve these multiple crises,” began António Costa.
The country’s main concern in November 2015, when António Costa’s first government took office, was the “situation of the financial crisis, both in the financial system and in public accounts”he recalled.
“Eight years later, we can say that fortunately we have a stabilized financial system”he declared, adding that the “public bank (…) is today not only a solvent bank, but also one that generates due benefit for the Portuguese Economy and Portuguese citizens”.
Despite the “extremely serious situation we had to face with the pandemic, we maintained a constant trajectory of improving public accounts, which allowed us to go from a situation of excessive deficit, in 2015, to a situation of positive balance, in 2023”.
“This journey, as you remember, was not easy”highlighted the outgoing Prime Minister, recalling that, two years ago, the European Commission threatened to “impose a fine on Portugal” and that the first positive balance “of our democracy” was achieved in 2019.
After the impact of Covid-19, António Costa recalled that the “State could not afford the luxury of accounting for what was necessary to spend nor counting on what the revenues were”. This, he explained, “is what a balanced budget balance is for: it is to allow us to face unforeseen events”.
Therefore, in 2020 and 2021, “we moved away from our trajectory – the deficit increased, the debt increased”.
“The good news is that we have already managed to recover from the impact of the pandemic on our public accounts and we closed 2023 with a positive balance in the Budget and with a reduction in the debt ratio, for the first time, to the target we had of staying below 100 percent of product”.
Furthermore, “Today we have all rating agencies classifying our debt as investment level”.
The second major crisis of the eight years in office was, recalled António Costa, the “dramatic” situation of the 2017 forest fires.
The response that was given later, regarding the restructuring of the Civil Protection system and the budget reformulation, “allowed the results over the subsequent six years to be quite different”.
The total number of fires in the country since 2018 has drastically reduced. However, Costa wanted to remember that Portugal is “a country with a high risk of forest fires” and that climate change “is a reality” and increases the risk of fire.
The third major crisis was the Covid-19 pandemic, “which affected two of these eight years and in which Portugal had a performance that is worthy of note”.
“We were the first country in the world to achieve a vaccination coverage rate of 85 percent”he recalled. “The effort to support the Economy and families allowed us to be one of the countries in the world that best came out of that pandemic situation”.
In addition to this, in response to inflation, what was “seen as a remedy for inflation – the rise in interest rates – had the effect of worsening families’ living costs”. But the fall in inflation, he congratulated, “has already led in recent months to a stabilization of interest rates and, while not being overly optimistic”, António Costa considered that “the ECB’s next decisions will not be to raise them but (…) to start a trajectory of progressive reduction in interest rates”.
“Despite these four crises that we had to face and overcame, it was possible over these eight years to achieve some structural changes in our society”.
Tags: Balance governance Costa highlights multiple crises overcome years
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