The Minister of Finance warns that “we are in a difficult, demanding moment” and, therefore, “it is essential that we maintain close cooperation between fiscal and monetary policy within the euro area” – a statement made by ferdinand medinain Brussels, the day the ECB president admitted that it may be necessary to raise interest rates faster than expected.

Given the “difficult moment” that the European economies are going through “I live this year and we are going in 2023, surelyFernando Medina defends that it was “precisely thanks to this coordination between monetary and budgetary policy that made it possible to provide an excellent response to the extremely harsh period of the pandemic and that it will also be needed next year.”

The ECB admits to raising interest rates faster than “gradually”

Fernando Medina’s statement was made in Brussels, on the day the Finance Minister is taking part in a Eurogroup meeting where João Leão’s candidacy for the European Stability Mechanism will also be confirmed and there will be “a broad and frank debate “. . on the best way forward, in a spirit of cooperation and unity.”

Medina added that “it is not expected that a final indication will come out today on the final decision, among other things because it does not depend on the Eurogroup, it will be taken with the advice of the European Stability Mechanism.” But there will be a discussion about the “four strong candidacies” that exist –Leão’s and three more–, considered Fernando Medina, without revealing which are the “important supports” that Leão already has.

The former Minister of Finance is “an appreciated personality within the Eurogroup, he has a great political experience, with results, he chaired Ecofin during the Portuguese presidency, but there are four strong candidates,” said Medina.

Portugal would not need to relax budget rules

Regarding the European decision to suspend the budget rules for another year, Medina advocated that “Portugal would not need this flexibility”, although he defended the decision. “It is a measure of prudence, of caution, in the face of an unstable and uncertain macroeconomic environment in several dimensions. At the same time, I had the opportunity to emphasize that we already comply with the regulations today and we intend to continue complying with them, ”he said.

As for Portugal, with “important growth and low unemployment”, Medina says that “it is expected that we will meet the budgetary and debt relief objectives” and in Brussels, according to the Minister of Finance, a “sign of confidence” was given. in relation to the trajectory that we proposed in the OE in terms of compliance and its impact on the economy”.

Regarding the “macroeconomic imbalances” that were identified by the European Commission, Medina devalues. “The macroeconomic imbalances mentioned that the Government has been the first to recognize, myself, the weight of the public debt, the reinforcement of productivity, are diagnoses made by the Government itself about the Portuguese situation”, concluded the Minister of Finance.