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CFP
Teodora Cardoso, president of the Council of Public Finance (CFP)
The former president of the Public Finance Council, Teodora Cardoso, harshly criticizes the State Budget for 2021 (OE2021) approved in Parliament, considering it “terrible” and pointing out “the risks” it entails.
“This is, by all accounts, a terrible budget, which is part of a long and almost uninterrupted series of bad budgets“He begins by pointing to Teodora Cardoso in an opinion article titled” The risks of a bad budget “that is published in the Jornal de Negócios.
The economist emphasizes that political commentators identified “the risk of the outbreak of a political crisis more or less in the short term “, but he did not speak of” another risk, also political: that of contradiction between accentuating the dependency on the governance of openly anti-European parties and the dramatic financial dependence of Europe ”.
Risks that are “aggravated by the weight of budget decisions economy and society“, Points out the former leader of the Council of Public Finance (CFP).
And we must remember that cynical argument that the European Union cannot leave one of its members just sink us“He also argues.
“A bad budget wreaks havoc: ignores the impacts of spending decisions, beyond the approval of potential voters; increases income only to cover expenses, regardless of their economic impact; It ends up reinforcing indebtedness, which weighs on future budgets and generates a financial dependence that we know well ”, analyzes Teodora Cardoso.
And the “main damage” it causes is “economic because they favor the misallocation of resources in the economy and, consequently, inhibit solid economic growth and the ability to implement effective stabilization policies ”, he considers.
Also, “damage” is also “Social because an economy that is not growing and is in debt does not have the means to sustain effective social policies ”, he emphasizes.
In the middle, “in an attempt to hide the deficits, accumulates harmful practices and accounting problems that, sooner or later, are discovered, aggravating crises and the loss of credibility with creditors and donors ”, says the economist.
Teodora Cardoso also highlights that OE2021 “does not provide any information -beyond the intentions- regarding the results that the different services must achieve with the credits assigned to them ”.
“Portugal is, together with Greece and Luxembourg, one of three, among the 37 developed countries that [OCDE] integrates, that they do not have any form of performance budget, that is, the necessary instrument to make their evaluation feasible ”, analyzes the economist, concluding that“an objective evaluation it only becomes possible when a shock makes it clear that reality has not fulfilled its intentions ”.
In addition, the budget also does not include “specific risk reports budgetary or financial stability ”. “The current problems of the NHS [Serviço Nacional de Saúde] and the social protection system show the consequences of this state of affairs, which if maintained will extend them to the pension system ”, he warns.
