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While the final final vote on the state budget proposal took place today, the polygraph reminds us of certain episodes – notably delays in the delivery of the document – that have marked the country in recent decades.
The Ayatollah in Iran brings the IMF to land for the second time in Portugal
The Iranian revolution led by the ayatollah Khomeiniand the Iran-Iraq war triggered the price of oil on international markets in the early 1980s. Portugal was then ruled by Francisco Pinto Balsemão (1981-1983) and rising oil prices forced the country to spend more money when buying oil or fuels abroad.
"We have experienced this huge crisis of rising oil prices in the 1980s because of Iran.There was a lot of tension in the Middle East, the price of oil has increased fivefold," said the minister. of the Interior of the time, Angelo Correia. .
The rise in the price of a barrelcompletely changed the balance of payments and state budget positions, "recalls the former minister and one of the founders of the PSD." A lot of money has been spent on oil and there is There have not been enough exports to catch up. That is why we had a huge crisis that led in 1983 to the devaluation of the escudo and the entry of the IMF in Portugal. "
With an external debt increasing by 732 million escudos in two years to reach nearly 1200 million escudos by the end of 1982, the PSD / CDS / PPM coalition government has again raised its rates. four point interest and sold 50 tons in early 1983 to mitigate the effects of the crisis, according to the newspaper Público.
But that was useless, because months later, the International Monetary Fund (IMF) landed in Portugal for the second time (the first intervention was in 1977), the government of the central block (PS-PSD) being installed under the direction of the government. by Mário Soares.
Despite the crisis that has hit the country, Ângelo Correia says that the state budget negotiations within the PSD-CDS-PPM coalition government have always been calm.
"This period was a difficult financial period, there was a constraint of not spending by all the ministries, all the members of the government felt that the situation was very difficult and that we could not pull the rope. at all, "according to the former minister.
The discarded diskette forces the boxes
Cavaco Silva obtained his second consecutive absolute majority in 1991. After Miguel Cadilhe and Miguel Beleza were finance ministers in their first two governments, the Social Democrat invited Jorge Braga de Macedo to this post.
"At this point, I had to take the state budget in boxes and crates.I tried to take a floppy disk, but they did not do it.The PSD quickly said:" Do not do that, otherwise they say that it is not valid because it is not paper ". I had to take a bodyguard with seven or eight bins, a ridiculous thing when you can use a floppy disk.
When he came to the government in 1991, university professor in his school curriculum with passages from the International Monetary Fund (IMF) and the European Commission. At the time of presenting his first budget, Braga de Macedo was surprised by the traditional practices of the Assembly of the Republic.
"At this point, I had to take the state budget in boxes and crates.I tried to take a floppy disk, but they did not do it.The PSD quickly said:" Do not do that, otherwise they say that it is not valid because it is not paper ". I had to take a bodyguard with seven or eight bins, a ridiculous thing when you can use a floppy disk. It was a bit physical, "says the new SBE professor.
"But they refused because there was fear and asked that it be paper, it was after the second absolute majority and the environment was such in relation to cavaquismo, it was furious," he said. remembers. "Later, it became totally accepted to be a floppy disk," he adds.
On the delivery of the proposal of the state budget in the The parliamentBraga de Macedo assures that he handed the document "always a few days before or before, it was not what the night delivery did as now".
The remaining 100 million to be transferred
The development of the state budget is a complex task for the various members of a government. This complexity can give rise to obstacles, errors or failures. Under the first government of António Guterres (1995-1999) one of these episodeswhen one of the ministries did not include in the 1996 budget a transfer of several million escudos for the national counterpart of European funds.
"There was an error on the part of the Ministry of Planning and then it was necessary to find a solution because they had forgotten that there were transfers to be made to the Ministry of Economy in the Structural Funds ", recalls Augusto Mateus, Minister of Economy of the time.
This transfer would be between 100 million euros and 150 million escudos. As the economist explains, although this amount "was included in the budget, it was not included in the list of transfers that would be made from the Ministry of Planning to the Ministry of Economy".
"When I discovered that I had an approved state budget in which no counterpart would have been written from the point of view of the national counterpart of the Structural Funds, it was necessary to rephrase that, "he adds.
"There was an error on the part of the Ministry of Planning and then it was necessary to find a solution because they had forgotten that there were transfers to be made to the Ministry of Economy in the Structural Funds ", recalls Augusto Mateus, Minister of Economy of the time.
After discovering the problem, Guterres' executive found a "technical solution" and proceeded to a "reprogramming" allowing the transfer of European funds between the two ministries.
The economist said it was a "period of blindness by the Minister of Finance and a period of negotiations within the government to develop the state budget." requirements of other ministers. Usually, there is a team of the Prime Minister and the Minister of Finance, who are the bad guys, while the other ministers are the right ones. "
The economist believes that the Minister of Finance plays a crucial role in balancing the desires of ministers and the expenses that can be incurred. "If I prepared a budget asking all ministers what they wanted to enroll in the OE, I would have twice as much spending as possible." The Minister of Finance is therefore playing an important role in of discipline in the development of the EO ".
Socrates "too optimistic" in this year of global financial crisis
In 2007, the subprime mortgage crisis exploded in the United States, resulting in a financial crisis that resulted in the bankruptcy of one of the largest US banks in 2008, Lehman Brothers.
The financial crisis eventually spread to Europe and to hit Portugal in full in 2009, whose economy fell by almost 3% this year, with unemployment rising from 8.5% to 12% between 2008 and 2010.
In October 2009, the parliamentary elections took place. José Sócrates was re-elected, but with a minority government. António Mendonça then joined the second Socrates government as Minister of Public Works, Transport and Communications.
In analyzing this period, António Mendonça considers that there was a "More optimism" by the Socrates government when it prepared the state budget for 2009, for not having foreseen the impact of the financial crisis on the national economy.
"This year 's deficit was very high because of the drop in tax revenues.There was an excess of optimism about the behavior of the economy, an overly optimistic expectation. the Portuguese economy had weathered the crisis better than it had really done, and the budget was also a reflection of the optimism that the economy would not suffer as much from the international crisis as from the economic crisis. suffering, "he recalls to the Polygraphe, ISEG professor.
In the 2009 budget, the first Socrates government promised civil servants to make a steady 2.9% increase in the largest increase in public sector pay since 2001.
This increase contributed to the rise in public spending and the widening of the deficit. Between 2008 and 2009, total public expenditure as a percentage of GDP increased from 44.7% to 49.7% for a total of 83.1 billion EUR. This percentage would increase to 51.5% in 2010 to reach 88.9 billion euros, according to data from the Bank of Portugal.
The increase in public spending during these years resulted in a budget deficit which, after reaching 3% in 2007, increased in the following years: 3% in 2008 and 9.8% in 2009 Already in 2010 José Sócrates' government has reached a record deficit of 11.2%fell by 7.4% in 2011, the year of the troika's entry into Portugal and the launch of the international financial aid program.
At the same time, the economy has had its ups and downs. After growth of 2.49% of GDP in 2007, the economy slowed down in 2008, while it grew by only 0.20%. In 2009, the economy plunged 2.98% to recover in 2010 (1.90%) before falling in 2011 (-1.83%).
But this year's deficit was also penalized by the drop in tax revenues due to the fall of the Portuguese economy, as tax revenues fell by nearly 14% to 30.6 billion euros, according to the data published by Pordata.
In his analysis, António Mendonca considers that the drop in tax revenues has been more penalizing for the deficit than the increase in spending. "This year's deficit was less due, on the contrary, to the increase in spending, but it was basically because of declining revenues that were not that anticipated."
The economist believes that the Socrates government has underestimated the international financial crisis. "Even at the international level, According to the reports of the IMF and other institutions, the idea was that the crisis would be well controlled, but we are still suffering the effects of this crisis. There was a general error of appreciation, which then resulted in mistakes made at the country level. There was in fact a great underestimation of what the crisis would become, "recognizes António Mendonça.
Teixeira dos Santos: Where is the budget?
Under Socrates administrations, several episodes of state budget proposals to Parliament were left to posterity due to delays and lack of documents.
One of the most famous episodes took place on October 14, 2008, when the Minister of Finance, Teixeira dos Santos, presented in an incomplete way the draft state budget for 2009, as several key documents appeared in the document. "Pen" delivered to Parliament.
At the time, the PCP deputy, Honório Novo, complained that the draft state budget for 2009 had been handed to deputies without report or map, which "makes the unintelligible document ". It's a mystery that the department [das Finanças] will have to solve. "
"It is the articulation, the bill: the macroeconomic framework is lacking, the report has not reached, nor the PIDDAC (Investment Plan and development of the administration.) Agência Lusa the Communist deputy.
One of the most famous episodes took place on October 14, 2008, when the Minister of Finance, Teixeira dos Santos, presented in an incomplete way the draft state budget for 2009, as several key documents appeared in the document. "Pen" delivered to Parliament.
"This is not normal.In practice, the budget has not been delivered" said the PCP MP, quoted by Diário de Notícias.
That year, the Socrates government submitted the OE proposal one day before the deadline of 15 October, but was delivered only three and a half hours after the scheduled time, the pen not containing much of essential information. The press conference on the OE presentation would only take place the morning of the next day.
Two years later, the state budget was returned incomplete form in Parliament, precisely by the same Minister of Finance, Teixeira dos Santos.
The presentation of the draft state budget for 2011 was scheduled for October 15 at 19:30. It was then postponed to 22:30, but the document was finally submitted at 23:30.
However, the "pen" handed out by Minister Teixeira dos Santos was, again, incomplete, because several relevant documents were missing, according to RTP.
The PCP and the Greens accused the Socrates government of disrespecting the Assembly of the Republic because the EO was incomplete.
Vitor Gaspar: "The huge increase in taxes" and wars with the constitutional
The technocratic economist without political experience was chosen by Pedro Passos Coelho to handle public accounts during the intervention of the troika. Driven by the task of raising taxes and reducing expenses, Vítor Gaspar has seen several of his budget measures taken by the Constitutional Court.
For the 2013 budget, the then Minister of Finance announced a "huge tax hike" by creating a 4% surtax on the IRS. Among the measures taken was the suspension of holiday grants officials and 90% of retirement allowances, as well as a 5% reduction in sickness benefits and 6% of unemployment benefits.
The constitutional decision forced the government of Passos Coelho to prepare an amending budget, as acknowledged by the Minister of Finance in June 2013. "The change in the state budget was necessary due to the fact that there was no change in the budget. increase of expenditure necessary following the decision of the Constitutional Court, "said Vitor Gaspar in Parliament, quoted by New.
But a year earlier, the Constitutional had already hit the first state budget of the PSD / CDS government. In July 2012, the judges of Ratton Palace ruled against the cuts to civil servants' allowances planned in the 2012 budget.
During his term, the government of Passos Coelho approved two amending budgets during three of the four years: 2012, 2013 and 2014, 2015 being the exception when the state budget for this year has been changed only one time.
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