Prayers rather than praise for Portugal

[luzribeiro.livejournal.com]

The more the Greek default is closing in, the more Portugal is being praised. The smaller of the two big Iberian countries, although usually considered peripheral to Europe, is now being cited as an example for other countries in crisis - including by the German foreign minister Steinmeier during his visit there a month ago.

The praise by politicians and experts from North Europe is mostly centered around the statistical data. Portugal's economy is showing some growth again, the public budget has stopped accumulating big new deficits. Unemployment is also going down, although it's still as high as 13% (31% among the young people).

The latter being the key to the otherwise quite bitter taste this praise tends to leave in the mouths of the Portuguese people. If we put the stats aside for a moment, the Portuguese are currently going through a real social catastrophe: slashed wages and pensions, ballooning taxes, and collapsing public services - and as a consequence, an omnipresent poverty and misery, especially for the elderly.

The only sector to draw benefits from the severe austerity seems to be the exports, while the domestic market has completely collapsed. The newly created jobs are so poorly paid that they don't allow people to have a normal life, so many of them have to work several jobs.

The youth, who are doomed to unemployment or miserable salaries, are flocking to the airports, one-way tickets in hand. The older Portuguese have largely lost hope at this point. Nearly 80% of the pensioners get an average pension of 384 euro, which is far from enough to make ends meet, given the living standard in Portugal.

Last autumn Portugal elected a new parliament. Not only the current government but the international creditors are seeing and calculating the political risks that have befallen the country. But they're both betting so much on people's loss of faith, that the IMF has dared to recommend even further austerity and slashing of public services.

The Portuguese minister of finance has already announced that there'll be a new decrease of pensions. And Coelho's government intends to quickly privatize a few more state-owned companies in the few remaining months before the next election. The Portuguese are particularly angry with the plans for partial privatization of the state air carrier TAR, currently employing more than 13 thousand people.

But betting on people's desperation could be a double-edged sword. Because neither the politicians nor the experts now praising Portugal for its "reforms", could offer anything in return - and the Portuguese society is living in a dangerous social imbalance.

Those who insist on new and further sacrifices and who are predicting a long and thorny road of reform, are actually acknowledging that despite all the efforts Portugal has put so far, the revival of the economy would be too fragile and fleeting. And if Greece defaults, the Portuguese economy could be dragged into a dangerous whirlpool as well. And then it could turn out that the policy of brutal austerity has ultimately led to a precipice rather than the promised land - because it cannot actually stimulate real revival of the economy, but is rather suffocating it solely for the sake of scoring statistical results. The only result of austerity would be the unjustified social cruelty that the Portuguese people have been forced to endure - with the natural extreme reaction that comes with it.

It's difficult to imagine the magnitude of the disillusionment from European politics that such a situation would bring - the fate of the currently praised Portuguese "example" could have a much more devastating effect on EU's credibility than the whole Greek drama that everyone's been talking about these days. And only then, the true substance of today's praise would be revealed.

Comments

[ddstory.livejournal.com]

Are you telling me that tightening the belts and squeezing all the air out is not helping? Blasphemy!

[johnny9fingers.livejournal.com]

You would have thought that after the examples of the C20th the austerity-only-at-all-costs principle would have been consigned to history.

It is like Keynes never existed, or at least never theorised or wrote about economics.

Oh well.