I already said it and I repeat. The increase in public spending because of the pandemic and to get out of it is worthwhile. Encouraging demand through the Ivoucher and reducing withholding taxes seem to be good ideas, but in practice, there is no reduction in income taxes.
What worries me is the increase in current or primary public expenditure, unrelated to the pandemic.
The paper accepts everything and writes that the budget deficit will be 7,3% of GDP and, as early as 2021, it will grow 4,3% is irritatingly optimistic or, what is more serious, unrealistic and irresponsible.
I do not believe that the deficit will remain at 7,3% of GDP this year, with Covid’s second wave plaguing our most important European partners, let alone believe in a GDP recovery in 2021. Idem, to say that the GDP decline in 2020 will be only 8,5% and that GDP will grow in 2021 by 5,4%.
It is very evident that none of these scenarios will be realized and only those who are in the world of companies, businesses and the economy feel that it is unrealistic. I am convinced that, in the Government, only the Minister of Economy has this awareness.
And, be amazed, when the budget is shamelessly expected to reduce public debt by about 4% in 2021. But how? If public spending increases and the Keynesian effects of European funds always take a few years to produce their multiplier effect ...
I am still suspicious of the creative solutions to deceive fools of the Left Bloc: to affirm that there is no budgetary allocation for the Resolution Fund, but that the banks, with their contributions and additional financing to the Resolution Fund for this, in turn, endowing Novo Banco with contingent capital, under contractual commitments, is throwing sand into the eyes of the Portuguese. The Resolution Fund falls within the scope of the public administration and the € 450M, resulting from the sum of the fund's revenues and financing, will count towards the deficit.
Both the creative accounting and the accounting fraud of companies and banks are criticized, but this fictionalized state accounting system, which is much easier to hide, is left unscathed. Look at the examples of captivations that, because they are not paid, do not disappear the obligations and commitments to pay later ...
I am concerned with the granting of social benefits, the advancements in the career of civil servants and the millionaire transfers to municipalities (Medina thanks you!). I am concerned with the additional allocation of € 500m for TAP, in the form of financing guaranteed by the State. Everything to avoid talking about austerity when it, in times of pandemic crisis, prevailed. We lost a unique opportunity in the sovereign debt crisis to restructure the state and its weight in the economy and we will miss this opportunity again to do so when the need is evident.
Perhaps the recipe for optimism resulted when Passos Coelho's timid austerity measures had already put the State's accounts in order and operated the clean exit. I have serious doubts that this revenue will result when the country's largest export sector is in a coma, tourism, the economy across the board does not show signs of life and consumption understandably does not induce growth in supply.
Not even the vaccine will save us!
The author writes according to the old spelling.