ECB’s Centeno: Portugal Has 2-3 Years to Ensure Debt Sustainability
29 December 2021
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Mario Centeno on Wednesday said that Portugal had two to three years to ensure its debt sustainability.
In an op-ed piece appearing in Portuguese magazine Exame, Centeno, who heads Banco de Portugal, wrote, ‘It is essential to resume the path of reduction in the public debt ratio, supported by a credible fiscal consolidation plan. The country has a time window of two to three years to reverse the increase in permanent expenditure as a percentage of GDP and reduce the structural tax burden.’
‘Only with a sustainable debt can the confidence of investors, national and international, be maintained’, he continued. ‘And it is also on sustainability and trust that the ability to retain talent, which families and schools make available to the economy, depends. This continues to be the most important investment with the greatest economic and social return. The quantum leap we have made in qualifications over the last 20 years, from 40% to 83% of young people with at least a secondary education, cannot be wasted.’
Portugal’s private sector would also need to resume financial consolidation, he said.