Leão will not compromise on the deficit target in the State Budget negotiations

  • ECO News
  • 15 October 2021

Portugal's finance minister recalled that the macroeconomic scenario is the "reference in all external analyses" on the economy.

João Leão said on Friday that he is not prepared to let the deficit target, set at 3.2% in the government’s proposal, slip during the negotiation phase of the State Budget for 2022 (OE2022) with left-wing parties.

During a conference organised by ECO, the finance minister stressed that the macroeconomic scenario is “important because it is the reference scenario in all [external] analyses about the country and even internally,” stressing that in the last six years there has been “concern” not to change it.

“It doesn’t mean that, within the framework of choices, there is no room to listen to concerns and make adjustments. But [since the return of the Socialist Party (PS) to power] I do not recall seeing any changes in the macroeconomic scenario since the government presented the State Budget until final approval,” the minister insisted.

About the leeway to negotiate measures with the Communist Party (PCP) and Left Bloc (BE), João Leão recalled that “negotiations do not have only financial dimensions”, but, even within this dimension, “there may be a rebalancing”. This is because the State Budget is “an exercise in choices and may involve redirecting measures in one direction or another” without increasing spending.

“We must always be willing to listen and try, within the possible framework, to see alternatives, as long as they are good for the country. We have to find solutions that are positive for the country,” he stressed.