The new minister of Finance: Vitor Gaspar

A couple of day ago, I wrote here about the ideal characteristics of the new minister of Finance: (i) deep knowledge of the deep workings of the public administration, (ii) Volcker-like determination on the goal (hit the deficit targets) while resisting the temptation to place public finances above the economy, and (iii) sharp knowledge of economic theory to be able to distinguish the good and bad ideas in this time of great change.

With Vitor Gaspar announced as the new minister, how did Passos Coelho do in his choice?

On (i), I don't know. On the positive side, Vitor has worked in the Ministry of Finance in the past, but it was a long time ago. On (ii), he was a phenomenal head of research at the ECB when the institution started, creating a great department out of nothing, well focused on what mattered. The challenge is of course now much greater, and Vitor's strength to stay focussed is going to be tested more than ever, but there is reason for optimism. On (iii), the choice could hardly have been better. In his combination of analytical knowledge of theory plus a good sense of pragmatism plus a generally sensible approach to using the little that we know about the economy, it is hard to think of too many Portuguese economists that are clearly better.

So overall, a fantastic choice. Well done, Mr. Passos Coelho.