TAP also makes another important contribution, in addition to the direct and indirect employment, there are many millions of euros spent with Portuguese companies and that also has a significant knock-on effect in terms of indirect employment.
I have no doubt that saving TAP is highly unpopular in some quarters. However, I believe truly that TAP is strategic and, in the past, we’ve had various situations in which the Portuguese state allowed a series of strategic companies to disappear for diverse reasons, something that should never have happened. If I was convinced that TAP was an inviable company, there would be no reason to save TAP. However, as a viable company, we should not allow for a period of external crisis, an exogenous situation caused by a virus, to lead us to lose a strategic asset for the country.
You mentioned earlier the issue of the moratoriums and economic recovery. The banking sector, in addition to this enormous challenge, also faces the challenges of recovering its reputation that has been buffeted by various reputational crises, some real and others perhaps for political purposes. Do you think there is a lack of Portuguese banking, a bank with a Portuguese matrix, or do you think we can be relaxed as if we only had major banks with large international presences as some European countries defend, and even the European Central Bank has attempted to show, that it would be important to exist?
I believe that a country that does not have an autonomous financial system is a country that is more dependent on the exterior, has lower levels of strategic autonomy. As a convinced European, I still believe the country needs to have strategic autonomy and the capacity to make some critical decisions and, to this end, should maintain an autonomous financial system. What does a financial system do? The financial system attracts the savings of residents and directs them to those who need financing, whether this is for their economic activities or to purchase their homes, whatever the purpose. If we do not have a national bank, the managers of any bank, an international bank that is just located here, shall take advantage of the national market but shall also seek to apply the resources of its shareholders in places that are able to return the greatest returns. And these may not necessarily be in the country. We have a very serious problem in Portugal, not only the lack of capital but also the lack of credit for productive investment. Our companies experience difficulties in accessing credit to make such productive investments. Banks lend money to those who already have money and not to those who have specifically interesting investment projects, hence, we need banks that are capable of financing this kind of productive investment. I believe that Portugal needs an instrument that other countries in Europe have, that is an investment stimulus bank. We have set up an investment bank to help channel the credit into productive investment by the private sector. And I do believe that if we do not have our own autonomous financial system, we shall once again be jeopardising our own interests.
9 The decision-making centres have to be inside the country to a to a greater or lesser extent…
I am neither a protectionist nor a nationalist. On the contrary, I’m a convinced European but no country has an autonomous voice if there is not the capacity to shape and influence some of the decisions that influence it.
10 And the new Lisbon airport. Is it desirable? Is it necessary?
It is absolute necessary that we reinforce the airport capacity in the region of Lisbon. All the projections for mobility and air connectivity end up as deviations from the reality over the long term. We shall continue however to travel by air and we are going to need to strengthen our airport capacity. The great drama, not at all understandable, is how this country, and particularly the region of Lisbon takes half a century to reach a decision as basic as how to go about reinforcing that capacity. We politicise everything and on this issue there is no obvious technical consensus. Therefore, these things become not only about differences in technical opinions but also party-political divergences. I hope that the path has been set out, as requested by the PSD (opposition Social Democrats), to define a strategic environmental evaluation of the feasible locations for Lisbon airport. I don’t know if this was entirely necessary but it was a condition for the PSD to support the passage of any legislation and so that whenever we do have a decision then we shall be able to advance with implementation without any new objections from the municipalities. We are wasting a lot of time but doing this in the only way that was possible.
I’m going to move onto another question in this field that establishes a link with the following. Do you think the large international corporations have, on the one hand, the confidence and, on the other hand, the returns on the investments they make in Portugal?
I’ve absolutely no doubts about that whatsoever. In recent times, we’ve witnessed major growth in foreign direct investment. In 2019, the investment stock in Portugal was at the highest level ever. We have some of the largest national exporters, some of the most profitable of all companies, are internationally owned. I continue to see in various industrial sectors, in services, finance, among others, the installation in Portugal of activities designed to serve the entire world. I frequently talk with foreign investors who are seeking out Portugal for factors that we, ourselves, do not value sufficiently; for example, the quality of our human resources not only in technical terms but also the availability to work in international environments, in the linguistic capacities and in the soft skills of Portuguese staff, the security, the political stability or the quality of our infrastructures. Foreign investors want to come to Portugal because it is a country fully participating in the European Union, with excellent relations with the rest of the world and with highly qualified staff for the type of investment that they wish to make.
From the fiscal duty point of view, both national and other international entities, consider that the fiscal load in Portugal is a little high. Do you agree?
Never in conversations that I have held with international investors has the question of the fiscal load been an issue. Firstly, because in Portugal we have a level of incentives and fiscal benefits for investment, innovation and development that are very powerful. Companies that invest in research and development may deduct from their taxable profit all of the expenditure they make on this area and, therefore, the companies that come here to invest do not talk about the fiscal question, on the contrary, what gets referenced is the advantages of SIFIDE (the System of Fiscal Incentives for Business R&D). SIFIDE was considered by the OECD as the second best system of all member state systems for supporting business research and development.
In this area, there is another area that I would like to highlight. Throughout some years, we had the idea that there was international competition to attract foreign investment through cutting costs, for example fiscal costs, we had the example of Ireland and other countries that specialised in being some kind of “tax haven” within the European Union. This question has been called into question for some years now. Under the auspices of the OECD, there is discussion on the taxation of multinationals and the need for minimum levels of corporate taxation at the international level. The idea is for an international definition that corporate taxation cannot be below “X” and that means companies no longer have the motivations for pressuring countries to lower their fiscal duties in efforts to attract foreign investment. And very interestingly, it is the new American administration, President Biden and Treasury Secretary Janet Yellen, that have stated that not only do they want to accelerate these discussions within the OECD but also that they want a minimum international IRC rate in all countries of 21%. There truly is an enormous desire to discourage competition via fiscal means in addition to, from a more self-interested point of view, not allowing American companies to move their headquarters abroad only to attempt to benefit from lower levels of taxation.
In my view, the very fiscal question is going to cease to be a factor for international competition. In Portugal, last year, the effective average rate of IRC was 21%, which compares well with what we shall probably have in the future. It also needs referencing that companies only effective pay taxation on their profits and this is not only about the application of a rate as first there are all the deductibles for fiscal incentives, benefits, and so forth.