Only three parties have “minimally serious programmes”
Just as political commentators have predicted, this year’s election promises would quickly lead Portugal into the quagmire of deficit.
With some sources (Bank of Portugal among them) already forecasting deficit territory for this year, the reality is that parties’ electoral bandwagons have opened the way to a great deal worse.
An ISEG (Lisbon school of economics and management) study has discovered that promises thrown to the electorate by CHEGA, LIVRE and CDU (communists) “would have the greatest impact”, with those of PS Socialists, the AD (coalition, currently in office) and Iniciativa Liberal being described as “minimally serious”, but still pushing it.
The idea behind the study is “to try and raise the political debate a little, and hold parties accountable, since currently no-one tries to estimate the cost of proposed options, which leads to programmes being quite unrealistic”, researcher António S Silva has told Expresso.
In other countries, he explains, programmes are checked and discussed by external bodies; scrutiny is much more realistic. One could argue, other countries equally do not tend to have governments falling every year (which Portugal has done, for the last three years).
To get an idea of how ‘outlandish’ parties’ pledges have become, CDU’s programme, for example, implies a minimum of €17.8 billion in associated costs (potentially a maximum of €24.8 billion – which would bump the deficit up to 8.7%. (The country currently is in positive territory, potentially leaning towards a deficit of 0.1%).
CHEGA’s programme – with its lowering of corporate income tax, and changes to the income tax brackets, would cause a deficit of 8.3%, say researchers, while LIVRE’s idea of a New Green Pact would imply an investment of up to 2% of GDP, “causing a deficit of 5.4%”. The plans of Bloco de Esquerda “would cause a negative balance of 3%”.
While AD’s programme, that of IL and the PS’ are “the most restrained of all”, they would still ALL of them jettison Portugal into the red: AD by 2.7%, according to the study, IL by 2.3% and PS Socialists by 1.2%.
In the words of António S Silva, the vast majority of parties’ promises and measures “are not serious (…) These standards are not feasible; there is no money or possibility of debt to finance them – and European rules would not allow it”.
In short, everything voters have been hearing this far “is propaganda”, says Silva, (which is almost certainly why the more enlightened commentators in the country have been exasperated by the whole election rigmarole).
ISEG believes things have to change: political parties need to be made responsible, “so that they start making realistic proposals”, he says.
This harks back to a comment made not long ago by presidential candidate Henrique Gouveia e Melo who said that if he became president, he would dissolve parliaments that didn’t deliver what they had promised. There was an ‘outcry’ of this being ‘impossible/ unconstitutional’.
Civic Association also highlights economic risks
Sedes – the Association for Economic and Social Development – has also warned this week that the risks posed by the geopolitical context should be taken into account in the policies proposed in parties’ electoral programmes.
Sedes equally defends the need for ‘urgent’ tax reform.
In an analysis of the various electoral programmes, Sedes pointed out that structural reforms are needed to ensure economic growth and European convergence, and that the policies to achieve this must be identified and quantified.
As far as taxes are concerned, there are proposals that Sedes believes are heading in the right direction, such as simplifying taxes, reducing the tax burden on families and companies and eliminating the progressivity of corporate income tax, but the association notes that there are also ‘new special situations that jeopardise the objectives of coherence and simplicity that have been advocated’.
Political watchers on television this week have also been discussing the ‘lack of reality’ generally in Portugal’s electoral campaign, saying parties appear to be acting as if the country exists within its own bubble, when there is so much more going on outside of Portugal that will bring consequences, no matter which party, or parties, end up governing the country after this Sunday.
Source material: Expresso
