The Finance Minister defended this Tuesday in Brussels that “responding to each nominal increase in inflation with increases from the point of view of public spending of the same dimension” would be “an error” that all the Portuguese would pay “very dearly”.
In a press conference after a meeting of EU finance ministers, Fernando Medina argued that it is necessary to be aware that, in the face of a crisis of this magnitude, from the point of view of rising prices, there is no State, no country, that can compensate on its own, eliminate the impacts that the rises have on the lives of their fellow citizens”, being only possible to mitigate them, and considered that, in this field, the Government has applied, “from the beginning, very important measures”.
If you look closely at what is happening in the different countries of the world, from the most advanced to those of medium development, what they are all doing is mitigating, never fully compensating, the strength of this movement that we are facing”, he pointed.
The minister defended that, in order to respond to the phenomenon of price increases, it is necessary “to have a response that, at the same time, protects the most vulnerable segments, that seeks to act on what is causing this price increase”. , therefore, mitigate these increases, but that they should not be instruments that can further feed the process”.
It would be an illusion, for example, to respond to each nominal increase in inflation with increases in public spending of the same magnitude. That would be a mistake. A mistake, by the way, that we would all pay dearly for, in two ways: the first was not solving any citizen problem; the second was to create an unsustainable budget situation, which was highly damaging to the lives of citizens,” he said.
Fernando Medina affirmed that this “has been a very clear line” of orientationeven “because inflation, if in a certain way it is a phenomenon that has been very infrequent in the last 20 years, for an important part of this generation that today studies and works in our market, the truth is that it is not at all a phenomenon unknown to economists”, is “a process that is relatively well studied, so it is important not to repeat mistakes that have already been made in the past, and that did not adequately solve or address the problem”.
Insisting then that it is only possible to mitigate the phenomenon of inflation, the minister said that, in this field, “the Government has, from the beginning, very important measures aimed at the various segments and acting in various areas”, highlighting measures ” of great importance”, such as “a very strong subsidy for fuel prices”, measures with “the most vulnerable groups, such as strengthening support for the food basket”, additional support in the areas of agriculture, labor and IPSS ( private solidarity institutions), to energy-intensive companies and, in the State Budget already in force, to pensioners, among others.
Given the inflation figures for Portugal in June —the National Institute of Statistics (INE) confirmed that the interannual variation of the Consumer Price Index (CPI) was 8.7%, the highest value since 1992—, the minister commented that “the number that was indicated is not new” and “that is why it does not change the framework” with which the Government has been working.
“We have been adopting measures to mitigate the price increases that are of great importance. A great significance from the point of view of the life of millions of Portuguese, but also a significant economic significance. We have a very wide range of measures that are being implemented and that are having their effect in mitigating the impacts that we are all feeling”, he reinforced.
Source: Observadora
