Brussels, Feb. 1, 2021 (Lusa) - During a debate in the European Parliament (EP), Portugal's finance minister João Leão refuted criticism from Left Bloc MEP José Gusmão, who accused him of "preaching" one thing in Brussels and "practising another" in Portugal.

The exchange of views between the MEP and the minister on the Portuguese government's action in the context of the crisis caused by Covid-19 took place during the "economic dialogue" between the finance minister, who chairs the Economic and Financial Affairs Council (Ecofin), and the EP's Economic Affairs Committee, scheduled for 25 January, but which had to be interrupted due to technical problems with the videoconference.

In the Q&A session, and after João Leão reiterated the importance of maintaining the stimulus to the European economy while the Covid-19 pandemic is hitting Europe - an idea repeatedly underlined both in the 'first part' of the hearing last week and today - José Gusmão confronted the minister with what he considered to be a contradiction between his words and the government's action in Portugal.

"I agree with what he said in his opening speech that support for the economy should not be withdrawn. However, the Portuguese government has the fourth weakest response to the economic crisis in the eurozone in 2020, the third weakest in 2021, and over the two years as a whole the second weakest [...] and this is even before we know that in the budget execution in 2020 the government was €3.7 billion below what it intended to invest in response to the economic crisis," he said.

He pointed out that, according to the government, this deviation was mainly due to a more positive result in tax revenue. He noted that "this more positive result in tax revenue explains only about €1.1 billion, and there is, therefore, €2.6 billion of investment support in health and support for businesses and citizens which simply did not reach the economy".

"If support shouldn't be withdrawn, why did the Portuguese government withdraw it?", he asked, adding that he gets the feeling that "the minister of finance has an opinion but doesn't believe it, he preaches one thing here in Brussels and practices another in the country".

In his reply, Leão, saying that he did not want to dwell "excessively on the Portuguese question", given that he participated in the session as president of the Ecofin Council during the current six-month period, insisted that he considered "it very important at this stage to have [budgetary] space to support the economy and not to withdraw stimuli too soon" and that this is what the Portuguese government is doing.

The minister considered the bloc's analysis "highly outdated," as it did not "take into account several additional supports brought online since October," and therefore "does not reflect the current situation.

Leão said the analysis regarding the budget execution for 2020 is also "incorrect, because it looks at public accounting data that have nothing to do with budget execution estimates," and, according to the minister, tax revenue is higher than expected, with "extraordinary behaviour, both in terms of taxes on companies and households" - "the only thing that explains the deficit being lower than the recent estimate," he noted - is explained "in part precisely because of the very significant support to the economy.

In conclusion, the minister noted that, according to data from the European Commission, "Portugal is one of the countries that is betting most on public investment," with "several very significant investments on the ground," which he considered "absolutely critical at a time when part of the private sector is minimal by social distancing," and, as a result, prevented from having as rapid a recovery as desired.

ACC/ADB // ADB.

Lusa