Portugal Portugal remains mired in recession, with forecasts for a 2013 GDP contraction of between 1.6% nd 2.7% and (perhaps) very mild growth in 2014. Unemployment is at a record high of 16%, and the government will miss the deficit reduction targets for this year (5.5% of GDP is the target, the real figure will be more like 6%), despite years of massive austerity cuts imposed by the 2010 €78bn EU bailout. The 2014 budget includes further cuts in public sector wages of between 2% and 12% per worker, and €728 million in pension cuts. Yet a further €3.3bn cuts are needed in 2014, together with yet another bailout. This has led to a collapse of support for the right-wing government. In the 2013 local elections the parties of the ruling coalition were heavily defeated. “The political environment is deteriorating”, moans the Financial Times. The Portuguese government, which has slavishly carried out all the austerity measures dictated by the EU, begs for patience: “Please give us a little more time”. But the Money-men in Washington, Brussels and Frankfurt and the troika are not in a mood for patience. As the price for a new bail-out they will demand cast-iron guarantees that the austerity programme will continue to be implemented. The stage is set for even bigger mass protests. Passos de Coelho, who boasted of being a strong man and a model pupil of the troika when he was elected in June 2011, is now exposed as the weak leader of a divided coalition. His government, which has earned the hatred of the people of Portugal, came very close to collapse after the general strike on June 27, 2013. This was the latest in a series of sustained mass mobilisations against the right-wing coalition. The Portuguese working class is rediscovering the traditions of the 1974-5 Revolution. One million people came to the streets in September 2012, then one and a half million in March 2013. The problem is one of leadership. The “opposition” Socialist Party is still discredited (it signed the bailout conditions just before being booted out of office) and only gains in percentage terms because of the increased rate of abstention. The Communist Party is the main beneficiary of this unprecedented wave of discontent. However, the two parties to the left of the SP are afflicted by a lack of a serious alternative to the crisis, the Bloco de Esquerda espousing a reformist-Keynesian “social Europe” and an “audit to the debt”, while the PCP advocates a semi-Stalinist “patriotic and democratic” economy outside of the euro.
Posted on: Thu, 30 Jan 2014 23:53:59 +0000