Mário Centano: "Portugal is a success in Europe"

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Mário Centano: "Portugal is a success in Europe"

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Welcome to the Global Conversation with our guest Mário Centeno.

Portugal’s Finance Minister is known for helping to transform an “ugly duckling” country, into a “swan” that has one of the highest rates of growth in the European Union. Mr Centeno has been president of Eurogroup since January and promises to create a consensus to reform the euro zone. Mr Eurogroup President, thank you very much for accepting our invitation. Is the example of Portugal, and this new narrative of less austerity, a given — or do you still have to work hard to convince more orthodox countries, such as The Netherlands, Finland, Germany?

Mário Centeno: Portugal is a success in Europe. Many of my economist friends call it the “darling of Europe”. Growth is strong and unemployment is shrinking, an area where we are leading Europe …. Portugal has always been committed to respecting the norms, but with a different interpretation of the ways in which these rules can be applied. This was a novelty that brought even more attention to our example.

Euronews: As Eurogroup President you have spoken a lot about the current election cycle: for example in France, in the Netherlands. We have a situation in Germany still unresolved. If there is a coalition government between the CDU and the SPD, and the Finance portfolio goes to Olaf Scholz, from the center-left SPD, do you think that will usher in a period of less austerity? This is a vision being driven by France’s President Macron, who is advocating greater European solidarity and greater public investment?

Mário Centeno: We have been working very constructively with the German government since I became Eurogroup President. The resumption of the process to complete the banking union is very important, it is benefiting from the excellent economic situation across Europe at the moment and also from the political cycle that you referred to. I do not think there will be any doubts about the compromise that Germany will keep bringing to this process, during this new phase.

Euronews: So let’s talk about euro zone reform. It has two very clear priorities: to complete the banking union and to reform the European Stability Mechanism. In the case of the banks, are countries really willing to share the risk and create a European deposit insurance, so that in the event of a new crisis taxpayers will be protected?

Mário Centeno: This reform is very important to assure European citizens that, in the event of the next crisis, our financial system is prepared, is better equipped and more robust. For this, we need to complete the banking union, to ensure we have all the means, all the necessary instruments. Living in a union it is always … – and we know it in our daily lives – it is always necessary to reinforce the bonds of trust and the mutual guarantees that are given in each moment. I think it’ s important is to generate consensus around institutions and offer solutions that respond to the wishes and anxieties we all have in Europe at the moment.

Euronews: The truth is that the small and medium-sized enterprises, the citizens, they continue to complain about how this fails to translate in the real economy, I mean for things such as more credit for entrepreneurs, improving the quality of life, creating jobs …

Mário Centeno: To demonstrate what I mean, I will give the example of Portugal but this is replicated in other European countries. Small and medium-sized companies have a financing gap in Portugal, compared to similar European companies, which is the lowest since the beginning of the century. That means that we have recovered immensely from what was a very traumatic process that we suffered during the crisis. Now, in Portugal, small and medium-sized enterprises and good investment projects are financed, in the short term, at rates lower than one percent.

Euronews: I wanted to talk to you about Greece. It’s a country where things are still difficult, where they still have yet to turn this page, to close this chapter. Pierre Moscovici, the European Commissioner for Economic and Financial Affairs, is optimistic. You seem to be as well. Can Greece exit its assistance program by the summer?

Mário Centeno: It is gamble and one we feel will succeed. We are optimistic. What is more important at this moment is to attribute to the Greek government, and the Greek authorities and society, the sense of ownership for their future. I attach great importance to this question – as we go through a transition between political and electoral cycles in Greece. It is very important that the next government keep that feeling of ownership about the whole process; because it is a very difficult process.

Euronews: I would like to speak now about the budget. The European Commission is preparing the EU budget for 2020 to 2026, when the UK will no longer be a major contributor. The Portuguese government has proposed three new taxes: in the energy sector, for companies that pollute a lot, for international financial transactions and one for digital platforms. Do you think that these ideas, already strongly supported by other southern countries, will be of interest to other European partners, in order to bring in new revenue?

Mário Centeno: The support for this kind of funding makes perfect sense in the context of the European budget. If Europeans feel closer to the issues regarding the way the budgets are funded and have a better understanding of these sources of funding, that will surely improve Europe’s greatest challenge – to bring citizens closer to the European project. So, the cause-effect nexus will be more visible and easier to understand. There are new challenges in Europe today: security, defense, migration, the demographic challenges we face in Europe … are transversal to almost every society and every European country and can in many cases be better dealt with at a European level.