By Catarina Oliveira
Three years ago the Portuguese Government called in the Troika. “Save wages and pensions,” was the pretext but that did not happen. Today the dramatic social consequences of the entry of the Troika in Portugal are easy to analyse. A look at the figures shows the spiral of impoverishment in which the country is now ensnared.
Taxes on workers have been raised these past three years by about 30%, as ordinary families have been subjected to sharp cuts in their income while public services like education and health have deteriorated and the prices of essential goods, water, electricity or transport, have risen considerably.
About 1.1 million Portuguese are now living in extreme poverty. Over 200,000 have joined the ranks of the poor since 2010. One in 4 people are now poor, a number that has grown 25 % in 4 years, with nearly 2 million citizens currently forced to get by with just 409 euros per month. The poverty rate increased from 21.3 % in 2011 to 24.7 % in 2012 .
In three years there has been an increase of 15% in families who cannot pay their electricity bills, or 3 out of ten people, according to the OECD. And there’s been a 30% rise in people who can’t pay for their gas.
The number of jobs destroyed in three years is another disturbing figure. The employed population in 2013 was lower than the employed population in 1997. We’ve seen employment regress a decade and a half, with over 500,000 jobs destroyed and an unemployment rate that hovers around 15 percent. You can only say it is falling if you ignore the scourge of emigration and seasonal fluctuations.
OECD figures published in 2014 show that unemployment has risen to more than twice the European average, and this in a country where more than half of the unemployed do not receive any welfare support, and close to 350,000 live in poverty.
Portugal’s Government has frozen pensions, cut welfare support for pensioners, reduced benefit paid to people on low incomes (the Social Integration Income or Rendimento Social de Inserção) and cut child benefits too. This has all had an unprecedented impact on social inequalities.
It is in pubic sector that the most significant changes have occurred since the entry of the Troika, with 80% of the cuts in state health and schools, and on the back of public employees and pensioners. In their two years in power, the PSD and CDS parties have cut 25,000 jobs in the state sector, with the public sector wage bill falling from 14 % to 10.4 % of GDP, far below the European average.
Since the Troika landed in Portugal there is no doubt where austerity has been imposed and which sectors have got off lightly – banks and large corporations have born just 4% of the cuts.
The most damning aspect of the Troika’s record is that the sacrifices the Portuguese have made these past three years were on the basis of economic blackmail, but in reality they have not helped the economy; they have had no other result than a general impoverishment of the country.
Consider this: in 2012 the deficit was Euros 10.4 billion. In 2013 Euros 5.3 billion in austerity measures were imposed, in cuts, taxes and unemployment. The deficit has decreased by just Euros 900 million, meaning we are poorer by Euros 4.4 billion.
Today, with nearly Euros 14 billion in austerity imposed since 2011 in taxes and reduced wages, the debt has increased by more than double the amount of the austerity cuts. The deficit is higher by Euros 800 million. Three years on, the Portuguese government will introduce this month a new package of austerity measures for 2015 to close the penultimate Troika review before May 17.
“People’s lives are not better, but the life of the country is much better,” the PSD tells us, with the arrogance of those who toy with people’s lives.
We all know that our lives we are much worse now in a country that is poorer, more unequal, more socially unjust, and that will only cease to languish if we reject of EU budgetary constraints and restructure our debt. These are essential preconditions for policies that will bring growth and employment.
Translation/edit by Revolting Europe