​Transparency and clear strategies are needed


Throwing money into economic problems can be counterproductive. Therefore, the fact that Portugal will receive a lot of money from the famous “bazooka” of the EU does not guarantee, in itself, that our economy will no longer be surpassed by the economies of Eastern European countries, which started at levels much lower than ours when entered Community Europe.

The “bazooka” deserves to be welcomed because, for the first time, it is financed by money that the European Commission advances to member countries, having obtained this money by issuing debt in the financial markets. It is a historic step towards the mutualization of debt in the EU, until recently taboo. Portugal will receive 16.6 billion euros, divided between investments for the resilience of the economy, the digital area and the environment.

But the effectiveness of the application of this money depends on many factors and is not guaranteed from the outset. Let’s look at an example of a company that receives money, which only hinders the progress of the economy. Hypothetically, this is a highly indebted company, which survives only because the bank that lent it money keeps renewing the loan (thus avoiding recording the loss of this potentially bad credit in its accounts).

In this case, the money coming from the EU could only serve to prolong that situation. Such an extension prevents the human, financial and technological resources available to such a company from shifting to other tasks, more productive and, therefore, more useful to the country’s economic progress. But, it will be said, letting this company go bankrupt will cause unemployment, which is a social scourge. It is true, but it is expected that at least a large part of the unemployed will find, without much delay, new jobs, where they will be more useful. Hence the importance of training workers, enabling them to deal with new technologies.

On the other hand, the money from Brussels should be directed primarily to sectors and companies where there are structural problems that hinder the country’s economic modernization. Which implies the existence of clear strategies in the application of that money.

Now such strategies, if they exist, are not yet of public knowledge – apart from, of course, those usual generalities. How to understand that money already has the green light from Brussels and these concrete strategies remain unknown? If this continues, the Government will not be able to complain about the growing suspicion that the money from the “bazooka” will serve above all to fatten up the State and to satisfy friends and supporters.

When, in the late 1980s, then Prime Minister Cavaco Silva managed to obtain greater financial aid from Brussels than was generally expected, it was relatively easy to set priorities. Thus, European money was used, at that time, to tackle pressing needs – such as basic sanitation, the arrival of electricity in many villages or the highways, which then, in Portugal, covered a few dozen kilometers. Then, as you know, we started to have an excess of highways, on several of which a car passes every now and then.

For decades, public investment in the railways has been neglected, as is well known. Now the intention is, and rightly so, to give priority to the railway. But there is no known strategy for achieving this priority. And if passenger rail transport is subject to permanent strikes, its users will gain nothing from this investment.

It is not enough for money to come from Brussels, it must be applied well and transparently. Otherwise, instead of progressing, the country will remain economically stagnant.


Source: Renascença – Noticias by rr.sapo.pt.

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