Schäuble’s six killing statements about Portugal

  • ECO News
  • 27 October 2016

The German minister of Finance does not hesitate to criticize, warn, suggest or comment Portugal’s choices. Many times, or most of the time, his statements are somewhat controversial.

The German minister of Finance, Wolfgang Schäube, left some messages to the Portuguese government this Wednesday. He said everything was going well… until António Costa took office. But this was not the only negative criticism the most orthodox governor in the EU made about Portugal. Here are the others.

“Portugal has been very successful until the formation of the new government.”

This would be Schäuble’s most recent statement, which directly speaks of the choices made by the government led by the prime minister António Costa. This Wednesday, the German minister of Finance stated the country was heading the right way until the Portuguese Socialist Party (PS) took office and declared they “would not comply with what the previous government set for”.

Portugal will ask for “a new programme and will get it”. In other words: “Portugal does not want a new programme and will not need it, if the European rulings concerning fiscal consolidation and deficit reduction are applied.”

It was 29 June and for a few minutes it was thought Portugal would live a new ‘hot summer’ – a period of political tension after the Carnation Revolution in 1975. Bloomberg brought forward a statement in which the German minister said the Portuguese government would request, and get, a new bailout programme. Yet a few minutes after this, in new statements, the minister stepped back.

“The desire is to encourage and avoid erroneous incentives so countries can act and do what must be done.”

This is a statement made in 12 July, when the Commission evaluated whether or not the Portuguese and Spanish governments should be sanctioned for not having taken effective steps to comply with the 2015 deficit goals. Schäuble stood out for having repeatedly asked for the abidance of European rulings, with a very orthodox interpretation of the Stability and Growth Pact. However, later on, in the meeting in which sanctions were cancelled, he is said to have been a key element in that outcome.

“Portugal should listen to the warnings made by the European Union when it comes to respecting public policies.”

In March 7, entering a Euro Group, Schäuble once again asked the Portuguese government to follow the public policies defended by Brussels. At this point, Portugal was discussing the 2016 State Budget, after a heated debate with the Community authority about the efforts made in fiscal adjustment.

“Portugal must do everything in their power to deal with markets’ uncertainty.”

This was a statement made at the sidelines of a meeting of the European Union’s Council of Economic and Finance ministers (Ecofin), quoted by Bloomberg in February 12. Schäuble gave the warning that several ministers have expressed “major concerns” about the increase in Portuguese interests in the markets and emphasized the country is not yet very “resilient”.

“The markets are getting nervous.”

On the day before, 11 February, Schäuble had already left a warning. He assured the markets were nervous about the path chosen by the government led by António Costa. “We are alert to the financial markets and, as I have just stated, I believe Portugal should pay close attention to what is happening and should not continue to upset the markets”, he stressed. In question were the measures the PS government is not complying with and that were implemented by the former Portuguese prime minister Passos Coelho.