The IMF mission chief for Portugal says it is too late for the government to take any action that would correct the looming deficit for the year end.
Helpfully suggesting that the focus should be on 2017, Subir Lall describes a Portuguese government that has failed to reduce its spend and has not made up the ground from increased tax volumes.
"It's too late to take action to correct the deficit this year" said Lall in an interview with Público who said he warned back in June that it soon would be too late to any measures to hit the year-end deficit target of 2.5%.
Now that there only three months left until Christmas, Lall says the IMF’s main concern is to see "realistic steps" taken to guarantee that 2017 is a better year but looking at next year's budget to increase indirect taxes while raising workers’ income levels, he is not convinced that even this is the right way forward.
One of Lall's 'realistic steps' are State spending cuts of €9 billion, hardly likely under the current socialist regime.
Lall is a cuts man and says that the government should reduce, not raise, wages for public employees and pensions
The IMF chief admits that taxes, especially indirect taxes already are very high in Portugal, “The VAT rate is quite high in general. That's why we think a spending reform would be a preferable way to achieve the budgetary targets.”
Lall said that the current slowdown in the Portuguese economy is not necessarily due to the oil price or Brexit and said any increase in the national minimum wage is not desirable as “it doesn’t create jobs.”
Lall also is part of a failed experiment and as the IMF is a primary lender to Portugal, his views will be published and then forgotten by the current government which aims to do almost precisely the opposite to Lall’s instructions.
Comments
My household budget is more sophisticated than the IMF's or the EU's.
Although events back in 1890 and their consequences like an anthem exhorting 'Attack the British' doesn't begin to explain the total failure to regulate any aspect of the Portuguese economy. Everywhere an impartial onlooker in Portugal looks is failure to show even a 2nd World approximation of control- beginning with that lynchpin of a countries economy; its banks.