EU Finance Ministers have approved “a new economic governance framework that guarantees stability and growth”, rejoiced the Spanish Presidency of the Council of the European Union on X (formerly Twitter). The reform intends to modernize the Stability Pact, a “budgetary corset” created at the end of the 1990s which limits the public administration deficit for each country to 3% of GDP and the debt to 60%.

While confirming these emblematic thresholds, the new text must make the adjustment requested from EU countries in the event of excessive deficits more flexible and realistic. Considered too drastic, this framework has never really been respected.

The agreement was widely welcomed by the finance ministers of the various EU countries, like Bruno Le Maire in France. “Historic agreement!”, he launched on X. “For the first time in thirty years, this stability pact recognizes the importance of investments and structural reforms”, he welcomed.

Reconciliation between Paris and Berlin

The agreement was made possible by a rapprochement sealed Tuesday evening between France and Germany, long at odds on the subject.

The indebted countries of southern Europe, like France, insisted on additional flexibilities in order to protect the investment necessary for the green transition and the military spending generated by Russia’s invasion of Ukraine .

Conversely, the so-called “frugal” countries of northern Europe, behind Germany, demanded constraints to achieve effective debt reduction throughout the EU.

Time was running out to conclude the debates. The Stability Pact has been deactivated since the beginning of 2020, in order to avoid a collapse in economic activity affected by the Covid pandemic and then by the war in Ukraine. It will be reactivated on January 1st.

The Twenty-Seven now hope to conclude the legislative process before the European elections in June on this text, which must still be negotiated with the European Parliament.

Unions and environmental groups pushing for more green investments, however, have been disappointed.

Own adjustment path

Concretely, Brussels is proposing that States present their own adjustment trajectory over a period of at least four years in order to ensure the sustainability of their debt.

In order to satisfy Germany, however, it is planned that all countries with excessive deficits will be forced to make a minimum effort to reduce the deficit ratio by 0.5 points of GDP per year. Paris, however, obtained from Berlin a relaxation of this effort over 2025-2027: over this period the increase in the cost of debt linked to high interest rates will be taken into account.

Report shows that costs to maintain the operation grew by almost 64 billion kwanzas in 2022, but the increase in earnings justified and saved the company that still benefited from a large increase in extraordinary results

TAAG’s operating costs jumped from 161.9 billion kwanzas recorded in 2021 to 225.8 billion kwanzas, recorded in 2022, points out the institution’s report.

According to TAAG data, to which OPAÍS had access, it shows an increase of more than 63.9 billion kwanzas in operating costs, a movement that led to operational results recording a drop of close to 20 billion, standing at 35.4 billion in 2022, below the 54 billion recorded in 2021.

Also notable is the increase in personnel costs, which jumped from 41.9 billion kwanzas in 2021, to 44.1 billion kwanzas recorded in 2022, as shown in data relating to the accounts of the national flag company. .

Amortizations, costs for paying debt and debt services, fell, reaching 25.3 billion kwanzas, below the 28.9 billion recorded in 2021.

The item “Other operational costs and expenses”, according to the report, stood at 153.1 billion kwanzas, above the 89.4 billion recorded in 2021, an increase of more than 50 billion, with the income operational if positioned at 190.4 billion kwanzas.

In comparison with 2021, operational income was more than 83 billion kwanzas higher than in the previous year, with service provision being the most profitable.

With regard to service provision, they were positioned at 184.6 billion, above the 100 million recorded previously, but also other operational gains were around 2 billion kwanzas higher than that recorded in the previous year, having positioned at 5.7 billion.

This performance led to the financial results, which correspond to the balance between gains and losses, reaching 10.5 billion kwanzas in 2022, below the 24.2 billion kwanzas recorded in 2021.

Despite this poor performance, the extraordinary results of more than 16 billion kwanzas and the positive non-operational results also helped to save the accounts and, contrary to the results of 2021, in 2022 a positive result would be recorded.

Here it is important to mention that there is also a positive note for the reduction to zero of the cost of work for the company itself, contrary to what was previously recorded, in which the company paid for work done for itself.

2024 with new management

It is important to remember that TAAG enters 2024 with new leadership, with the recent appointment of António dos Santos Domingos as president of the Board of Directors (PCA/Chairman) and Nelson Pedro Rodrigues de Oliveira as the new president of the Executive Committee (PCE/CEO).

By: Ladislau Francisco