Portugal’s President’s New Year speech praises the "relevance" of the 2014 Budget and did not note any doubts he might have about the constitutionality of the 2014 State Budget, unlike last year when he referred the 2013 Budget to the Constitutional Court.
In the message sent to the Portuguese people the President referred to the 2014 State Budget as an instrument of paramount importance to achieve the central goal of ending the financial assistance programme successfully and for accessing external financing markets at reasonable rates.
Cavaco Silva approved the 2014 budget on Monday with the decision published in the Official Gazette on Tuesday. The opposition parties said that the budget contained unconstitutional aspects and would be asking for it to be referred to the Constitutional Court.
The President claimed in his New Year speech that "there is reason to believe that Portugal will not need a second bailout," admitting at the same time that a "precautionary programme is a different reality. There are reasons that we may need to count on the support of our European partners in helping us access financial markets."
Cavaco Silva said that in May 2014 the Financial Assistance Programme will come to an end and that access to external financing "at reasonable rates of interest requires a successful completion of the programme. This is a key objective, which is in the state budget for 2014 and is an instrument of the utmost importance."
Cavaco Silva said that a second bailout "would mean the continuation of the austerity policy and the deterioration of the credibility and image of Portugal" and there would be a high risk of the country heading into a more severe situation.
Whereas the President reckoned that a precautionary programme, a second bailout by any other name, would be "a different reality," he said the country requires all political, economic and social interests to give maximum effort and common sense, including a patriotic sense of responsibility.
"Everyone, whether in government or opposition, must live up to the crucial moment in which we live," insisted the President, also warning that it is an illusion that after the end of the assistance programme every problem will be resolved and that we could return to a period of uncontrolled debt.
"So it is vital that we are well aware of the rules of budgetary discipline and economic policies to which Portugal, as all other eurozone countries, are subject."
Cavaco would have risked much if he had again referred the budget to the Constitutional Court. Last year he did this and the Court found that the cut in public sector wages was indeed against the constitution.
The repetition of this situation could have left the President in a politically fragile situation so for 2104 he is playing the role of government yes man to ensure that waters remain calm even if there are legitimate concerns from opposition parties over aspects of a budget which promises more wage cuts and reductions in state expenditure.
Cavaco has tried to do his po-faced Solomon act but is seen by many as evading a key part of his job description which is the impartial oversight of government legislation and budgets.
His description of a provision for a financial package, post-Troika, as a ‘precautionary programme’ fools nobody as it seems to many the same as a second bailout. If the markets react badly to Portugal’s release from the Troika’s protection then the government may well need a financial escape route in case interest rates on bonds sky-rocket as they have done before. This second financing resource is not necessarily a bad thing and may be good housekeeping but the government’s denial that this second layer of defence is being worked on, or even discussed, therefore can not be true.
The vice-chairman of the PS opposition, José Junqueiro, said on Wednesday that the Presidential message was just following the government line.
"In the coming days we will ask for an audit of the 2014 State Budget," said Junqueiro, adding that after a budget with cuts of more than three billion euros, the government is also cutting pensions further, a move which should be referred to the Court.
"What most strikes us about the intervention of the President is the callousness with which he speaks of the sacrifices by the Portuguese, while saying that we still have the freedoms and rights of citizenship," said Junqueiro.
For the leader of the socialist bloc there is a big difference between the rights provided for in the laws and their implementation. The vice president of the socialists spoke of "thousands and thousands of Portuguese working away without access to basic necessities," which in the opinion of the socialists "deprives" the Portuguese of key citizenship rights.
