JE personalities: Mário Centeno - The miracle worker of the budget surplus

Mário Centeno led the Finances of Portugal to the first budget surplus in 47 years - a feat that many distinguished Portuguese economists would have liked to have accomplished.

Cristina Bernardo

Jornal Económico chose 30 personalities from the last 25 years that have marked, in a positive and negative way, the current Portuguese society: politicians, businessmen, managers, economists and civil society personalities. The methodology used to compile the JE Personalities is explained at the end of the text.

Mário José Gomes de Freitas Centeno (Olhão, 1966), 18th Governor of Banco de Portugal, started his role as regulator and maximum financial authority without lacking extreme experiences in his professional life: the 1664 days in which he served as minister of Finances in Portugal have gone down in history because they were concluded with a budgetary surplus of 0,2% of the Gross Domestic Product in national accounting, registered by the INE and related to 2019. Nothing more extreme than having been responsible for the first budgetary surplus in 47 years, considering that since 1973 that the Finances of Portugal had not recorded budget surpluses, especially at a time when the European Union did not follow a smooth path and when Portugal still has the experience of bankruptcy, rating of garbage and the austerity of the times of the troika.

According to the long series of Banco de Portugal published by INE in 2014, the 2019 budget surplus was the only one after 1973. It is necessary to go back to the end of Marcello Caetano's consulate to identify the consecutive positive budget balances that occurred between 1970 and 1973, with finance ministers João Dias Rosas and Manuel Cotta Dias (the last Minister of Finance and Economic Coordination of Marcello Caetano).

However, according to the economist Nuno Valério's statistical series, published in “The Concise Economic History of Portugal”, a budget surplus was only recorded in 1970, with the Minister of Finance, João Dias Rosas, in the 3rd Government of the Estado Novo. Dias Rosas - uncle of the historian and politician Fernando Rosas, founder of Bloco de Esquerda, in 1999 -, was the one who promoted the liberalization and internationalization of the Portuguese economy, assuming himself as one of the exponents of the so-called “Primavera Marcelista”.

Going back to the Second World War, since 1940, only in seven years have there been records of budgetary surpluses in Portugal, namely, in 1942, 1951, 1952, 1970, 1971, 1972 and 1973, according to the series by Nuno Valério and INE. In democracy, since 1974 the Portuguese budget registered budget deficits, one of the worst being that of 1981, which reached 12,5% ​​of GDP, followed by the 2010 deficit, with 11,2% of GDP.

But in addition to the 2019 performance, Mário Centeno still presented an unblemished budget record until the second month of 2020, moving on to the economic and social catastrophe caused by the Covid-19 pandemic, which was another extreme experience also lived by Centeno. Citing the Directorate-General for Budget (DGO), “budget execution, in public accounts of Public Administrations, recorded a positive balance of 1274 million euros until February”, which corresponds to an additional “four million euros compared to the same period last year. , reaching the highest value ever by February ”2020.

More: “the State's revenue grew (3,5%) in line with the growth in expenditure (3,8%)”. “Excluding these effects (from time lags that affect year-on-year comparability), the balance would have improved by approximately 69,3 million euros, with a 3,1% increase in revenue and 2,7% in expenditure”, explains DGO.

Praise for the Portuguese “Super-Mário”

The rating agencies did not spare praise for Mário Centeno, nor did Brussels fail to congratulate the performance of the national accounts, guided by the helm of the Portuguese 'Super-Mário'. Once again, it is proved that the interest rates of the markets are transparent, when they presented levels close to zero, in a correlation attributable to the good behavior that the Finances of Lisbon patented until February 2020.

The academic world already knew that Mário Centeno was a good economist, but he had never tested his political ability, well proven after having secured the portfolio of Finance in the XXI Government of Portugal between 26 November 2015 and 15 June 2020, in addition to the performance shown as president of the Eurogroup between 12 January 2018 and 13 July 2020, despite all the criticisms that were pointed out by officials from other countries regarding the lack of method in conducting Eurogroup meetings - knowing that those same officials are unlikely to leave history with a budgetary performance similar to that of the Portuguese they criticized so much.

Mário Centeno graduated in Economics in 1990, having a Master's Degree in Applied Mathematics in 1993, by ISEG - Higher Institute of Economics and Management of the Technical University of Lisbon. In addition, he holds a Master (in 1998) and a Doctorate (1995-2000) in Economics from Harvard Business School, Harvard University, USA.

At Banco de Portugal, he was an economist since 2000, becoming deputy director of the Department of Economic Studies, from 2004 to 2013, which he accumulated with the position of member of the Economic Policy Committee of the European Union. From 2007 to 2013 he was also chairman of the Working Group for the Development of Macroeconomic Statistics, at the Superior Statistical Council. Centeno is also a Full Professor at ISEG.

Appointed Governor of Banco de Portugal on July 17, 2020

On June 9, 2020, he announced his departure from the government of António Costa, with effect from June 15, 2020, having been replaced by João Leão at the Ministry of Finance. On July 17, 2020, the Prime Minister appointed Mário Centeno to become Governor of Banco de Portugal.

Centeno has always defended that the growth policy should be guided by stimulating domestic consumption, thus promoting the reconstruction of the productive apparatus. As for the Achilles' heel of the Portuguese labor market, it has also explained that the origin of the existing problems is a segmentation between highly protected workers (the oldest, with open-ended contracts) and workers who have almost no protection (the youngest, mostly precarious) ).

This is one of the areas that he mastered best, had he not done a PhD thesis in Economics from Harvard University in 2000, precisely entitled “Essays on Labor Economics”. At the Francisco Manuel dos Santos Foundation - part of the Jerónimo Martins Group - he also published the book on this area “Work, a market view”, which portrays the problem of fixed-term contracts, which he proposed to eradicate through the adoption of an employment contract single.

Another Portuguese labor weakness is the low qualifications of a very significant percentage of the national workforce, he says. He also advocated the adoption of unemployment insurance associated with an individual worker's account.

Regarding the costs of adjusting the Portuguese economy, Mário Centeno has argued that it is the high proportion of workers with fixed-term contracts that support the toughest adjustments.

Finally, it maintains that the increase in the minimum wage has negative effects on the employment of less qualified workers and that unemployment benefits should have a variable duration, becoming longer in times of crisis and shorter in cycles of prosperity. .

Only use the “bazooka” in productive investments

As governor of Banco de Portugal, and in a speech given at the IMF's annual meeting, Mário Centeno sent a message to the Government, in an alert tone, that only productive investments will have the capacity to ensure that the debt in which the States they will incur cannot be transformed into a “new financial crisis”, calling for the sensible use of the potential “European bazooka”, because it considers that the debt is only sustainable when the debtor generates sources of income. Furthermore, he advised that there should be no premature withdrawal from the monetary and budgetary stimuli used to face the economic crisis.

In early November 2020, at the closing session of the Annual Conference of the Order of Economists on the State Budget for 2021, Centeno considered it necessary to keep Portugal prepared for the day when the elimination of the pandemic crisis begins, admitting that this will happen. in a close moment. The current governor of Banco de Portugal calls for “avoiding at all costs”, removing workers, so as not to destroy the country's productive capacity, so that the economy maintains all the functions “capable of acting when orders return to arrive".

His connection to the academic environment seems to continue to assume a lot of importance in his life, given that he returned to teaching duties - gracefully - while responsible for the curricular chair of “Economic Analysis”, in the Information Management degree in “Nova Information Management School ”(New IMS), taught at the Campolide campus. Mário Centeno had previously taught at Nova IMS - before he served as Finance Minister.


Jornal Económico (JE) selected the 25 most relevant personalities for Portugal in the last 25 years, referring to the period marked out between 1995 and 2020, highlighting those who had the greatest influence on the development of civil society, the national economy, and the international growth of our groups business, in the way the Portuguese Diaspora and Portuguese-speaking communities evolved, in the process of attracting foreign investors and, in short, in the way the country has established itself in the world. This list was published on September 4, 2020, before the first weekend of the ninth month of the year. Resuming the initiative from the last weekend of September, but now extended to 30 personalities, the JE will publish, every Saturday and Sunday, texts about the 30 selected personalities, in descending order. To the 25 names initially published, JE now adds the names of António Ramalho Eanes, António Guterres, Pedro Queiroz Pereira, Vasco de Mello and Rui Nabeiro.

It is necessary to explain to the reader that the methodology followed was guided by journalistic criteria, without privileging eminently political personalities, who tend to have a greater media profile than that given to entrepreneurs, economists, managers and lawyers, but also without ignore the politicians who have been determinants in society during the last quarter century. Also not ignored were the personalities who, having died shortly before 1995, had an economic, social, cultural, scientific and political impact until 2020, as is the case with José Azeredo Perdigão and the work he built throughout his long life. life - the Calouste Gulbenkian Foundation.

The ranking is initiated by the historical leaders of five Portuguese business groups, with Alexandre Soares dos Santos in first place, distinguished as a major employer in the area of ​​food distribution, and for promoting the internationalization of his group in geographies such as Poland - with the brand “Biedronka” (Joaninha) - and Colombia. He also assured the passing of testimony to his son Pedro Soares dos Santos. The Jerónimo Martins Group has been encouraging the use of marine resources, by increasing Portuguese aquaculture production in the Madeira Sea - although several economists have highlighted the importance of the Portuguese maritime platform as a source of wealth, few entrepreneurs have supported projects in this area , being the group led by Soares dos Santos one of the cases that did not neglect the potential of the Portuguese sea.

It follows in second place Américo Amorim, who in addition to his cork empire - the only sector in which Portugal has achieved world leadership -, stood out in the world of energy and oil, ensuring the continuity of family control of his business through your daughters. Belmiro de Azevedo appears in third place, consolidating the activity of his Sonae, as well as participation in the competitive world of telecommunications and the development of his food distribution group, with testimony passed on to his daughter, Cláudia Azevedo.

In fourth place is António Champalimaud and the work that the “captain of the industry” left, in banking consolidation, as a shareholder in Grupo Santander - one of the largest in Europe -, but also in terms of research carried out in the health area, at the Champalimaud Foundation . Fifthly, Francisco Pinto Balsemão is the one who focused his business life on building a communication group with integrated platforms and solid positions in the leadership of the press and television during the last quarter of a century.

The politicians appear among the following individuals, led by Mário Soares (who appears in 6th place). António Ramalho Eanes is in 7th place, António Guterres in 8th, followed by Marcelo Rebelo de Sousa (9th), António Costa (10th), José Eduardo dos Santos (11th) - due to the weight that his family members had in the Portuguese economy , especially his daughter Isabel dos Santos, and for the investments made in Portugal by the group of Angolan politicians and businessmen close to the former president of Angola, currently questioned, mostly, by the Angolan justice - and Aníbal Cavaco Silva (12th). Jorge Sampaio comes in 13th, followed by Mário Centeno (14th), José de Azeredo Perdigão (15th), António Luciano de Sousa Franco (16th), Pedro Passos Coelho (17th), Álvaro Cunhal (18th), Ernesto Melo Antunes (19th), Luís Mira Amaral (20th), Pedro Queiroz Pereira (21st) ), Vasco de Mello (22nd), Ricardo Salgado (23rd), José Socrates (24th), Ernâni Rodrigues Lopes (25th), Francisco Murteira Nabo (26th), Rui Nabeiro (27th), Leonor Beleza (28th), António Arnaut ( 29) and Joana de Barros Baptista (30).

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