Debt restructuring? Portugal must tame the market, not fight against it, says Centeno

  • ECO News
  • 9 August 2017

Mário Centeno dismisses the possibility of a debt restructuring. The Finance minister stated, in an interview to El País, that the right path is to "tame the market".

Debt restructuring? No, that’s not the way to go. It is better to “tame the market” than to fight it, states Mário Centeno, in an interview to El País, reinforcing that the Portuguese debt restructuring is not the best option.

“This is an interesting debate, but only intellectually speaking”, sated the Portuguese Finance minister when asked about the Spanish newspaper whether or not he thought of a national debt restructuring scenario, reinforcing that he is not in favor of such decision. “We did not have it in our electoral campaign, nor do we contemplate it now: one cannot fight the market. It needs to the tamed, not fought”, stated Mário Centeno.

Also in the interview, Mário Centeno explain that the current level of Portugal’s growth was achieved because of three main points: “After the flaws of 2015, we did three things. Firstly, we cleaned up the financial system. Secondly: with the stabilization of the banking, consumer and companies’ trust improved, so they started investing and creating jobs. And thirdly, a shift in politics: we achieved a primary budgetary surplus with the decrease in taxes, which was translated in an improvement in employment”, stated the Portuguese Finance minister.

Mário Centeno was asked about the success of the Portuguese parliamentary coalition (Socialist Party and the left) and what could be taught to Spain and Brussels, and answered: “The main lesson is that reforms take time, and demand policies, to work”. He further added: “That is not Brussels’ recipe: so we need to explain that to the Eurogroup. But that has to be the Left’s recipe. It works: we approved budgetary restrictions, but have not stigmatized demand policies. It would be even better if they were European stimuli policies, because the handicaps of countries like Portugal are clear. We were able to have demand policies and reduce the tax burden with the help of our coalition partners, but within the rulings“, he concluded on the subject.

Mário Centeno does not fully exclude the possibility of submitting an application to the leadership of the Eurogroup: “I will not say that possibility does not exist”, he stated.