Former Finance Minister Fernando Medina was heard on Tuesday by the Budget, Finance and Public Administration Committee regarding the reduction of public debt in 2023, after the Budgetary Support Technical Unit (UTAO) deemed the reduction to be "artificial".

Among several points, Medina stressed that the UTAO report contains an "error" that he deemed "very serious" - but there is more. 

Here are four points that marked Medina's hearing: 

1. UTAO's conclusion is "false"

Former Finance Minister and current PS deputy Fernando Medina stated that there was no guidance for Social Security funds to be applied to public debt and deemed UTAO's conclusion to be "false".

"There is no, there was no moment during the previous government when I held the position of Finance Minister when any guidance was given for the use of funds" from Social Security to reduce public debt, said Fernando Medina.

2. Medina says that 2023 GDP will be revised upwards (and debt below 99%)

Former Finance Minister Fernando Medina said that GDP should be revised upwards and that debt should have remained below 99% in 2023, pointing to data that will be released in September.

"On September 20, 2024, new data will be released [...] and do not be surprised if GDP [for 2023] is revised upwards and public debt is not 99.1%, but will most likely be below 99%", said Medina in reference to the 2nd notification of the Excessive Deficit Procedure by the National Institute of Statistics (INE).

3. Águas de Portugal? "Not approving a capital increase is the correct decision"

The former Finance Minister also stated that the decision not to approve a capital increase for Águas de Portugal (AdP) was "correct", because there was no reason for such a capital increase.

"The decision not to approve any capital increase is the correct decision", said Fernando Medina, stressing that it would be "absurd" for AdP to reduce capital in December to increase it in January, having expressed full agreement with the current Finance Minister, Miranda Sarmento, for having decided to refuse the capital increase.

At issue, in the set of these three companies, are 130 million euros (100 million from AdP, 20 million from NAV and 10 million from Casa da Moeda), with the current PS deputy and former Finance Minister noting that with this value, public debt was 99.1% of GDP at the end of 2023 and that without these 130 million euros it would have been "99.1%" of GDP.

4. Putting debt below 100% of GDP? "It was clearly a political objective"

The objective of putting the public debt ratio at a value below 100% of GDP was political, stated former Minister Fernando Medina, pointing out the impact of this objective on the country's and the economy's financing capacity.

"The determination to have debt below 100% was clearly a political objective, which I consider to be of the utmost importance", stated Fernando Medina, who is today being heard by the Budget, Finance and Public Administration Committee regarding the reduction of public debt in 2023, after the Budgetary Support Technical Unit deemed the reduction to be "artificial".