This Time Portugal Protests Against Austerity
Thousands of Portugueses marched on the streets of more than 20 cities in Portugal today, protesting Portugal Government’s extreme austerity measures that were implemented in exchange of a €78 billion ($101 billion) international bailout needed in 2011.
The people on the streets were shouting and waiving their placards that said “Screw the troika, we want our lives back.” in Lisbon, demonstrators threw tomatoes and beer bottles at the IMF’s office. ‘Troika’ is the nickname given to The European Commission, the International Monetary Fund (IMF) and the European Central Bank, the lenders behind the country’s financial bailout. It literally means a Russian carriage pulled by three horses, but no Russians are involved in this situation.
The crisis had already led to the resignation of Prime Minister José Sócrates, after he tried to push through a fourth package of austerity measures. In June 2011, Pedro Passos Coelho, the leader of the Social Democrats, became prime minister as the head of a center-right coalition government with the conservative Popular Party.
Portugal is one of the PIGS (also PIIGS) as it is named by some international bond analysts, academics, and the economic media, referring to the economies of Portugal, Italy, Greece, and Spain due to their debt problems. The use of the term in the media has been limited since it was considered offensive by the countries’ people (no kidding).
The country has been battling with the debt crisis since the spring of 2010, that began in Greece and has spread across much of Europe’s periphery. Similar to the Greece, the Portugal government has also gone under debt by over expenditure and investment bubbles through unclear public-private partnerships and contracts.
These partnerships have funded numerous ineffective and unnecessary projects and consultancy committees and firms, allowing considerable failure in state-managed public works. They also inflated top management and head officers’ bonuses and wages. (I strongly urge all of you to read/listen to the article that was published by us, titled The First Truly Global Empire: John Perkins’ Interview with Progressive Press.)
When these projects, their inept managers and corrupt, inefficient politicians plunged the country in debt, interest rates began to rise as a consequence of investors’ fears, mounting the country’s already high debt burden. As a response to this situation, Portugal’s government, with the guidance of the European Commission, the International Monetary Fund and (IMF) and the European Central Bank, decided to enact three rounds of austerity measures. These measures in return put the country’s economy further into deep recession, making the situation worse.
One of the conditions of the bailout by the troika was to implement sweeping fire-sale of state companies to privatize them. So far the sales include 21% of the state utility company Energias de Portugal for €2.7bn, and a quarter share in electricity grid operator REN for €387million to China.
Portugal has also tried to tap oil-rich former colony Angola for investors as it aims to sell off everything from public broadcaster RTP to parts of the postal service, water utilities, state banks, the rail service and oil firm Galp.
Meanwhile many state hospitals are closing. Many teachers are out of work. State benefits, public wages and pensions are being cut. By January 2012, the ratings agency Standard & Poor’s cut Portugal’s credit to junk status. By June, the country’s unemployment rate had jumped to 14.9 percent.
Image Credit: Video-BBC News, Photo-The Hindu