Former Finance Minister Fernando Medina criticized, this Tuesday, those who question the country's credibility with the political objective of attacking the previous executive, referring to the reduction of public debt last year. He assures that no indication, guidance or awareness was given for the use of additional Social Security funds and accuses UTAO of a "very serious error".

"Over the last few years, Portugal has been on a path to recovering credibility and we have succeeded", the former Finance Minister began by recalling in Parliament. "These results were the result of the effort of the Portuguese people and of a very firm and determined vision of the previous Government in pursuing them. I regret the attitude of several people, who I see today, who do not hesitate to question the country's credibility in order to obtain political gains simply to attack the previous Government and resort to everything", declared Fernando Medina.

There was no instruction whatsoever to reduce public debt, much less artificially

The former government official also assured that "there is not, and there was not, during the previous government, at any time, any indication, guidance or awareness given for the use of additional Social Security funds so that this would result in a greater use of funds to purchase Portuguese debt".

Fernando Medina therefore considers that there was a "very serious error" on the part of UTAO.

The former Finance Minister also guaranteed that "there was no instruction whatsoever to reduce public debt, much less artificially" and added that "any insinuation on this subject is truly false. False".

You can follow the hearing here live.

This hearing in the Budget, Finance and Public Administration Committee was requested by the CDS-PP and was approved by all the parliamentary groups present, including the PS.

The intention to proceed with this request had been announced the previous week by the leader of the centrist parliamentary group, Paulo Núncio, who accused the previous government, in which Fernando Medina was Finance Minister, of having made an "artificial reduction" of the debt with "pension money".

At the time, Paulo Núncio said that UTAO "warned that the debt reduction carried out by the socialist government in 2023 was merely artificial" and that "it was only done at the expense of money from the Social Security Financial Stabilization Fund and the General Retirement Fund".

In a report on market conditions, public debt and external debt up to March, released on April 10, UTAO considers that the substantial increase in the debt consolidation factors in 2023 results from budget surpluses and the "deliberate search for applications in bonds", indicating that this increase in applications from organic units in debt instruments will result in some cases "from mere management options", and there are also cases in which "the financial management options were conditioned by government guidelines".

The document from the body led by Rui Baleira classifies the reduction in public debt as "artificial".

The public debt ratio stood at 99.1% of Gross Domestic Product (GDP) in 2023 and in nominal terms decreased by 9.3 billion euros compared to the previous year, to 263.1 billion euros.

[News updated at 3:50 pm]

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