Government Assures No Structural Changes to Social Security This Legislature: What’s Next for Portugal?

The Government's recent decision to establish a working group to assess the sustainability of Social Security (SS) has sparked significant controversy. However, Finance Minister Joaquim Miranda Sarmento reassured on Saturday that no structural measures will be taken during the current legislature. He stated, “Social Security does not face any short-term issues, but rather medium and long-term challenges.” He emphasized that any necessary measures would be presented in a future electoral program, allowing the public to decide whether to support it.

In the podcast ‘The Mystery of Finance’, a collaboration between Eco and CNN Portugal, Sarmento noted, “If the legislature ends, we are talking about 2028.” He dismissed claims that Social Security is bankrupt, preferring to describe its sustainability as facing challenges and risks.

The Minister revealed plans for an extensive study and public debate throughout the legislature to raise awareness about the true state of Social Security, including the Caixa Geral de Aposentações, which operates under different models. He highlighted that those aged 40 to 55 could expect to receive only 40% to 45% of their average salary under current rules, a significantly low amount at today’s prices.

Sale of Novo Banco

When asked about the future of the current Governor of the Bank of Portugal, Mário Centeno, Sarmento stated that the decision would be made closer to the end of the current term in June, clarifying that he has not discussed it with the Prime Minister or in the Council of Ministers.

Regarding Novo Banco, he was straightforward, indicating that “if the opportunity arises, it will be normal for the State to sell its stake,” and added that “with 25%, it is difficult to control management.” The Lone Star fund, which controls 75% of the bank, has already informed the Ministry of its intention to sell between 25% and 30% of the bank, with the remaining 25% being directly and indirectly held by the Portuguese State.