Economy minister hopes to keep six-year growth rolling with big spending plan
Portugal’s economy minister, Pedro Siza Vieira, doesn’t want his country to slow down, in the wake of an impressive comeback from the Troika international bailout, with six straight years of growth, he’s calling for 13 billion euros in spending to keep the growth rolling.
“The country is hungry for new investment,” Mr. Vieira said in an interview this week, and the government is planning to spend about 10 billion euros over the next four years on infrastructure projects, with the private sector expected to provide additional money.
Some of the funds in the new investment plan, which calls for works including upgrades to infrastructure staples such as roads, railways and public transportation, will come from the European Union, Mr. Vieira said.
This comes as European Central Bank officials have warned governments to make better use of public funds to help spur growth. This advice suggests working to improve conditions on the ground in order to attract businesses.
For Portugal, transportation infrastructure could be the best place to start. It can take 12 hours by train to travel the 625 kilometers from Lisbon to Madrid, compared with just over two hours for Paris to Bordeaux, a slightly shorter distance.
Private investors are expected to pump in an additional 3 billion euros for the Portuguese plan, which also envisages a much disputed second airport in Lisbon (Montijo) and expansion of the nation’s biggest port (Sines).
“Bettering land, air and sea connections with the rest of the world is also a crucial step in enabling the country to play a bigger role as an entry and exit point for goods to and from the EU”, said Mr. Vieira.
Improved links may also convince investors to move production to straight Portugal, he said. “It’s critical that we enhance the most decisive factor of Portugal’s competitiveness, our geographical location,” he said. Portugal has the advantage of being the westernmost nation in mainland Europe, making it an attractive location for investment from across the pond..
However, one unkind truth which clips Portugal’s wings in regards to growth is that building modern infrastructure requires the type of skilled workers who left the country during the economic crisis, and the Troika bailout. Lisbon is trying to convince some of them to return, offering tax cuts and cold hard cash for relocation. “So far 1,500 emigrants have signed up for the “Return” program since it began last year”, Mr. Vieira said.
“The financial crisis all but destroyed this industry,” Mr. Vieira said, referring to construction and engineering. “Our professionals fled to everywhere else in the world.”
While the global economy faces uncertainties, Portugal should continue to grow on a “very sound basis,” claimed the economy minister, who is aiming this year to post the first budget surplus in four decades of democracy.