Portugal neglected investment in certain areas of the health system, namely in “long-term and long-term care”, and this was reflected in “higher contamination and mortality rates” in this pandemic crisis, points out the European Commission (EC) in the evaluation to the Country within the scope of the European Semester, released yesterday (pdf, in Portuguese).
In addition to investment in health, Brussels also asked the government to accelerate public investment in infrastructure (speaks of the example of transport and ports) in order to get out of the recession faster.
In the set of recommendations made to Portugal, the EC recognizes that “at the beginning of the covid-19 outbreak, a plan was gradually put in place to introduce a new governance model for public hospitals, which provided for substantial increases in their budgets annual ”. “Its firm implementation, in the current situation, can contribute to reinforcing the resilience of the health system.”
However, Brussels regrets that “the covid-19 crisis demonstrated the fragility of long-term care structures in Portugal, which registered higher rates of contamination and mortality”. The population that depends most on this type of care is especially the oldest, as we understand.
“Despite the improvements in the territorial coverage of long-term care over the past decade, universal access rates are low in all regions of the country”, adds the community executive.
The defense of the government, by Centeno
The government has repeatedly refuted this type of criticism, saying that health is one of its biggest bets. Mário Centeno, the finance minister, said at the end of the 2019 budget execution that “primary expenditure [despesa pública total excluindo os juros] grew 3%, influenced by the expressive growth of the expenditure of the National Health Service (SNS) in 4.8%, with the investment in the SNS growing 17%, reaching the maximum since at least 2012.
In the increase in personnel expenses, “the very significant growth in expenditure on salaries for health professionals (7%), especially doctors and nurses, stands out”, added the minister’s office. In the balance of budgetary execution in the first quarter of this year, he repeated these arguments. There is a “significant increase in SNS expenditure by 12.6%, namely in personnel expenses (7.2%)”.
But the Commission has serious doubts about the scope of that bet: “Before the covid-19 outbreak, it was predicted that spending on long-term healthcare would register one of the biggest increases in the Union (as a percentage of GDP)”, reads in the new document dedicated to Portugal.
Thus, Brussels insists that “efforts must be continued to improve the efficiency and capacity of healthcare and long-term care to combat the current crisis, as well as to face the challenges posed by demographic aging”.
Old doubts
About a year ago, in a working document in support of the commission’s analysis of macroeconomic imbalances, the EC also criticized the lack of investment in public health on the one hand.
But, at the same time as asking for more investment, the EC says that there are financial problems that must be taken care of. In the same work of February 2019, the Commission technicians refer that “the financial sustainability of the health system in the short term remains a concern” and that “although health expenses in Portugal were below the EU average, their long-term increase is expected to be one of the largest in the EU ”.
The EC also underlined at that time “the need to invest in the National Health Service remains substantial, with a view to building new hospital centers, strengthening primary health care and upgrading medical equipment” and that “inequalities persist access to health care ”.
Centeno would respond to this already in January of this year, saying, as mentioned, that investment in the NHS grew 17% in 2019, “reaching the maximum since at least 2012”.
Anticipate large public investments to get out of the hole
In addition to Health, Brussels asks the Government to anticipate investments and to further facilitate the entry of private investment into the economy. “To promote economic recovery, it will be important to anticipate the realization of robust public investment projects and to promote private investment, namely through reforms”.
It speaks specifically of investments in “research and innovation, digitization, connectivity and ecological transition”. These “will contribute to the recovery of the Portuguese economy”, as well as to sustainable growth over the long term.
The EC defends even greater speed in “investments in transport infrastructures that may contribute to respond to the peripheral situation of Portugal, namely by closing the gaps in terms of rail connections with Spain and by allowing to exploit the potential, currently underutilized, of Portuguese ports ”. The new airport is never mentioned.
In the same communication it made yesterday to the EU countries, the Commission said that Portugal must spend what it can now to combat the effects of the virus on the economy, but that later, it will have to put the accounts in order again.
“When economic conditions permit, Portugal should follow fiscal policies with the objective of reaching prudent fiscal positions in the medium term and ensuring debt sustainability, while strengthening investment”, says the executive led by Ursula von der Leyen.
