Portugal’s premier Passos Coelho was elected in June promising that deep and rapid spending cuts would turn things around for Portugal. The chances of him delivering were slim. The people had chucked out the Socialists because they had promised the same miraculous recovery through the same austere economic medicine, and failed to cure the ailing patient. The EU/IMF bailout package that Coelho and his right-wing coalition government swallowed hook and line five months back dictated economically suicidal deficit reduction targets, and as has been the case in Greece, Portugal is now in a bigger mess than ever.
Coelho’s promises of an export surge have evaporated along with growth across Europe. Spending in the local economy – internal demand – has collapsed. This is expected to shrink the economy by 1.9 percent this year and at 3 percent in 2012, in what is likely to be Portugal’s worst recession since the 1974 ‘Carnation’ revolution, according to forecasts. This in turn means Portugal has been missing deficit reduction targets – as tax receipts fall and because of simple statistics – the targets are expressed as a ratio of economic growth.
Europe’s capitalist banking crisis and the policy responses are hitting its weakest economies hardest and within them the weakest members of society.
In Portugal, one the poorest EU states, unemployment stands at 12.4 percent, or around 700,000, the highest level since the 1980s. And these official figures underestimate the scale of the social crisis, according to the CGTP trade union confederation. Once you include the army of “underemployed”, the precarious workforce, largely made up of women and young people who are working part-time involuntarily, on short term or zero hours contracts, or highly qualified/skilled people in low-paid jobs, you are talking about 1m people, or about 18% of the working age population surviving on little or nothing.
Add to this cuts to wages, welfare and public services, increases in working hours, plus hikes in VAT, and it is not surprising that the Portuguese people are deeply unsatisfied.
Especially as they see large companies and banks who raked it in during the good times, on the back of tax giveaways, huge state subsidies (after the 2008 global financial meltdown) and cheap credit from the European Central Bank getting off lightly. Portuguese families – now deeply indebted thanks to a squeeze on incomes caused by wage restraint and a rising costs of living and facilitated by reckless but highly profitable lending by banks – are being expected to pay 10 times more towards the bill to cut the national deficit than corporations.
An opinion poll at the last month showed most Portuguese do not trust the centre-right government and do not believe it will meet the deficit targets. As many as 81 percent disagreed with the draconian draft 2012 budget, which detailed the extortionate demands of the 78 billion euro EU/IMF ‘bailout’ package.
Anger and disillusionment has been pouring into the streets with protests kicking off almost every week since the start of the fall. On October 1, rallies against the austerity measures called by the CGTP saw 130,000 marching in Lisbon and another 60,000 in Porto, the country’s second largest city, and there were mass protests across the country on October 20. On November 12, civil servants and soldiers staged an anti-austerity protest in Lisbon with marchers shouting and carrying banners reading, “No to stealing wages”, “Yes to work, no to joblessness”.
Tomorrow (Thursday 24 November), Portugal’s trade unions will stage a general strike to say no to the unfair and unnecessary pain. It will be the second general strike held over the past year jointly by the historically divided trade union confederations.
The message will be that there is an alternative to the self-defeating austerity measures: policies for growth financed by a fairer and more effective tax system where the rich and corporations pay more and there’s zero tolerance for their tax dodging; a boost to public investment, wages, pensions, which will help lift the local economy and underpin strategies to repair the country’s damaged industrial fabric; and finally, a much slower and less steep deficit reduction plan.
Today (Wednesday 23 November) the unions said the strike was a “serious warning” to the Government, with CGTP leader Carvalho da Silva criticising the Government for “impoverishing” the country and “unscrupulous employers” for taking advantage of the economic crisis to “increase the exploitation” of their workforces.
Both confederations also reject the planned privatisations that include the national airline TAP, airport managing company ANA, the freight transport branch of the railways CP, and the postal service CTT, as well as stakes in the power and electricity companies EDP and REN.
PM Coelho is looking increasingly desperate. He was in his native Angola last week. Not for pleasure, but to seek urgent investment from the booming oil-rich former colony into the collapsing economy on the Atlantic fringe of a crisis-ridden Europe.
But Angola won’t bail out Portugal, any more than China will rescue out Italy.
A real alternative to the failed neo-liberal medicine prescribed by the IMF and EU institutions and dished out by current and past Portuguese governments is needed.
An alternative that, like the Portuguese unions’ strategy, seeks to put the needs of ordinary people, rather than bankers, first.
Portugal’s General Strike November 24 – what the CGTP trade union confederation says:
This general strike is for economic growth, jobs with rights, boost to the productive sector, increase in wages and pensions and stronger protection and welfare.
This General Strike is for the renegotiation of the debt, against the programme of aggression against workers, people and the country.
• The country is faced with an austerity programme without parallel since or on April 25 [Portugal’s Carnation Revolution]
• We are facing an economic recession, an increase in the exploitation of workers and the impoverishment of the country.
• The culprits for this situation are the international Troika [ECB-EU-IMF] and the policies of the government of the PSD/CDS
• The claims that these policies are inevitable are false.
• What is inevitable is the resistance and persistent struggles of the workers and the Portuguese people against these policies.
The CGTP rejects
• The increase in working time by 2.5 hours to 42.5 hours a week because it will cause unemployment, cut salaries and subvert collective bargaining
• The 50% reduction in overtime rates and “hour banks” because it will results in a 30% cut in income
• A cut in holidays as it will transfer income from workers to the pockets of large shareholders and bosses
• Changes to make it easier and cheaper to fire workers, cuts to unemployment benefits and other welfare payments
• A brutal increase in process of essential goods and services like electricity, gas transport, medicines and the unmeasured and unsustainable increase in the cost of living
• Privatisations in particular transport companies that will increase prices, reduce services, attack workers rights and cause more unemployment
• So-called reforms of the local and central public administration that will lead to a qualitative and quantitative reduction in services and destroy thousands of jobs
Employment – Wages – Rights – Public Services
This is the politics of scorched earth. We must defend the interests of our country, of workers and the people, guaranteeing a future and [economic] development and not the interests of moneylenders and usurers. These are policies applied to Greece with the result that we are all aware of. The “holes” in the public accounts with which they are attempting to “assault” the pockets of the workers are not the workers fault and much less that of the struggles they have led.
It is the policies followed by successive governments that have destroyed Portugal’s productive capacity; the public-private partnerships that consumed tens of billions of euros to the advantage of the few; the thieves of public money like the “deals” by BPN or BPP [banks] that will be paid for by the Portuguese people; collusion [between business and politics] and corruption; the tax fraud and evasion and the black economy.
We are face with unacceptable attacks on workers in the private and public sector, and a brutal attack on democracy, on guaranteed constitutional rights and an attempt at subverting the democratic political system.
Portugal will not impoverish and ruin itself, not will it subordinate itself to the interests of foreign capital and Europe’s big powers.
For all these reasons for the violent attack on the dignity of working people and those who dedicate themselves to the country for the aggression against the legitimate aspirations of the young, let’s all join the general strike!
More information (in Portuguese) at