Brake to support Novo Banco is a “circus number, but it doesn't violate the Constitution”, says inspector

The cancellation of the transfer of 476 million euros to Novo Banco, approved in the State Budget, is not unconstitutional, but "will generate civil liability," former Secretary of State for Tax Affairs Rogério Fernandes Ferreira told Lusa.

BE's proposal to cancel the transfer of 476 million euros to Novo Banco, voted in favor on Thursday by PSD, BE, PCP, PEV, Chega and the non-registered deputy Joacine Katar Moreira, abstaining from PAN and CDS- PP, “it is a circus number, irresponsible it is certain, but it does not violate the Constitution, nor the State Budget Framework Law”, said the lawyer and former Secretary of State for Tax Affairs in the second Government of António Guterres ( PS), Rogério Fernandes Ferreira.

The former professor of Public Finance and Financial and Budget Law, at the Faculty of Law of the University of Lisbon, understands that what the Constitution and the Budget Framework Law (LEO) impose is “only that the Budget Law of the State 'take into account' and 'take into account', respectively, 'expenses arising from law and contract' ”.

“They therefore oblige the Government, first of all, to include them in the proposed budget law that it presents to the Assembly of the Republic. But they do not impose on the deputies, when discussing and approving the budget law, to keep this inscription. They can approve it or reject it or change it ”, advocates the member of the working group appointed by Sousa Franco for the preparation of the preliminary draft of the Budgetary Framework Law published by the Ministry of Finance.

According to the former ruler, “the competences in this matter and in this period, of the Government and the Assembly of the Republic, are, respectively, to propose and to approve, or to reject or change, the Budget law proposal”

"These powers are exclusive to each of these sovereign bodies and are absolute and non-delegable", he said.

However, the BE proposal, approved by parliament, prevents “the Government from fulfilling and honoring a previous contractual commitment that it has made on behalf of the Portuguese State”, whose associated expenditure “cannot be carried out if and as long as it is not included in the Budget”.

According to the lawyer, “what is certain is that a possible non-compliance with a contractual clause due to the impossibility of realizing the expense (not budgeted) will always generate civil liability (contractual) and indemnity, either for emergent damages or for loss of profits, certainly to be declared by judicial sentence ”.

The former professor of Public Finance added that "also these 'expenses resulting from sentences of any court' must be taken into account and 'considered' in the budget law".

“Now, during budget execution, deputies, even those who approved this BE proposal, are prevented from proposing the inclusion of 'new' expenses”, under penalty of violating the brake law, explained Rogério Fernandes Ferreira to Lusa.

Thus, “either the expense is due to its own line or to the sentence execution line - which certainly will not allow the expected value - or the circus will continue, imposing, even during the budget execution of 2021, a new proposal for budget amendment law of the Government's own initiative ”, an amending budget, he concluded.

Parliament's plenary session on Thursday confirmed the vote on the specialty of BE's budget proposal, which annuls the transfer of 476 million euros from the Resolution Fund to the New Bank.

In a confused vote that had to be repeated, after being called up and debated in the plenary, PSD, PCP, PEV, Chega and the non-registered deputy Joacine Katar Moreira joined their votes to BE to make this change possible, despite the votes against PS , Liberal Initiative and non-registered deputy Cristina Rodrigues, and abstention from CDS-PP and PAN.

The Minister of State and Finance, João Leão, has already admitted, in statements to Rádio Renascença and RTP, that the Government can go to the Constitutional Court to analyze the proposal.

In parliament, João Leão also said that the proposal to cancel the transfer to Novo Banco "violates the Budgetary Framework Law, which obliges the State to budget the commitments assumed".

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