Costa to ECB chief: I’d do anything to continue fiscal consolidation process

Prime Minister António Costa on Wednesday told the president of the European Central Bank (ECB), Christine Lagarde, that he would do whatever it takes to ensure that Portugal continues the process of fiscal consolidation and healthy public finances. [EPA-EFE / TIAGO PETINGA]

Prime Minister António Costa on Wednesday told the president of the European Central Bank (ECB), Christine Lagarde, that he would do whatever it takes to ensure that Portugal continues the process of fiscal consolidation and healthy public finances.

In his speech, which made no direct reference to the current Portuguese political crisis, the prime minister warned that governments’ economic, social and budgetary policies “do not operate in isolation and their effectiveness and scope are impacted by the actions of central banks.”

“Measures adopted promptly were essential to – and unlike in the previous financial crisis – ensure financial stability, ensure the necessary provision of liquidity and avoid the fragmentation of markets which, in a context of high uncertainty, would have impeded national responses in many member states,” he said.

Costa then said that the costs of issuing public debt remained “at historic lows”.

“Unlike the previous crisis, companies did not see their access to credit limited, in a particularly critical period of their activity; the interest rates faced by companies remained at historic lows,” he added.

“In the Portuguese case, employment is already above the pre-pandemic level, and unemployment is at a lower level than before the pandemic. On the other hand, the first half of 2021 recorded the highest level of business investment in Portugal since records began,” Costa said.

The prime minister explained that the response of the European System of Central Banks is vital to ensure a policy mix that does not jeopardise economic recovery and reinforces and strengthens it instead.

(Pedro Morais Fonseca | Lusa)

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