Dimitris Rapidis

The public budget plan of Portugal for 2013 was presented by Minister V. Gaspar a couple of days ago. The government is insisting on tough austerity measures, including a further rise of fiscal measures. Overall, the new measures correspond to 3,2 % of the GDP, which is in fact interpreted in the cut of two wages for average-income families.

It is advocated that these measures are agreed along with troika in order that public finance targets can be reached and a new fund of 78 billion euro can be drawn from IMF, ECB and the European fund. Needless to stress out that Portugal is faced with the deepest recession since the 1970s, with unemployment rate overscaling the limit of 15%. Analysts are pointed out that it is not certain that these measures will finally pass by the Parliament, as social unrest is mounting. Therefore, the coalition government has to cope with conflicting interests as deputies denying to vote for such counter-social measures.

Conservative President Silva is underlining the threat that the new austerity package can pose to the Portuguese society, when unemployment and poverty rates cannot be afforded. In addition to that, the are many politicians and analysts pondering about the real outcome of austerity measures, as long as since now there are no signs of macroeconomic improvement, but in the contrary people are suffering and cannot safeguard their personal dignity.

Portugal is, along with Greece and Spain, the third victim of troika’s austerity politics. Two years ago it was said that Greece was facing major problems of macroeconomic stability and therefore tough measures shoud be taken to decrease public debt. During the last year, Portugal and Spain were pressed to adopt equal measures. Now, after two years of austerity politics, the only thing left is no improvement, no job openings, no growth, no prospects, but only wage and pension cuts along with further taxes. In this respect, austerity has led to a deadlock for a growing wave of Eurozone member-states, that, above all, have achieved nothing more than violating social cohesion in their societies.

To conclude with, I leave you with the following question after the statement of the Dutch Central Banker, arguing that “it might take decades for member-states in order to reduce their public debt up to 60% of the GDP“. Accordingly, are the overdebted member-states willing to keep austerity politics for as long as public debt turns manageable and reduced to 60%? And if this target is to be achieved one day, will civil wars be avoided or European societies will be sunk into medieval obscurantism and extreme poverty?

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  1. Although I do think austerity is needed to a certain extent, I agree that Greece and Portugal are on their knees and can’t take much more of those “necessary” cuts. You end your thoughts with an interesting set of questions. I suppose one could answer that this is precisely why the Nobel price was given to the EU. It serves the European public as a reminder of the EU’s basic foundations, i.e. to bring peace and solidarity to the continent.

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