PM stresses need to ‘preserve financial stability’, reduce public debt

Portugal’s prime minister, António Costa, speaking at a gathering of his governing Socialist Party (PS), has stressed the need to “preserve the financial stability” of the country, arguing that it would be impossible to support companies and families in 2022 if public debt were at the levels he inherited from the last right-of-centre government.

“We are determined, notwithstanding all the effort we are making to support companies and families, to continue to reduce our debt,” the PS secretary-general told a meeting in Lisbon on Monday night at which he presented the government’s draft state budget for 2023 to Socialist members and supporters.

“It is very important in these times we manage to preserve the international credibility of our country and manage to preserve the financial stability of our country,” he argued.

Costa, who has been prime minister since 2015, explained to his audience at Lisbon’s Capitólio theatre that “Portugal has a large debt” and noted that, at a time of rising inflation, “central banks are significantly increasing interest rates” and hence there is a need to pursue a policy of reducing public indebtedness, to reduce the state’s burden.

When this happens, he argued, public resources are not “wasted on debt servicing” and can be channelled to improve “the National Health Service, public schools, welfare benefits.

“These social support measures that we are giving … we would not be in a position to give them if we were paying the interest rates that we were paying when we came into government,” Costa concluded.