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Tag: IMF

Portugal: All Quiet on the Western front?

by RICARDO NORONHA*, euronomade 

Taking the blue pill

Far removed at the western tip of Europe, like the cousin one occasionally hears about, the ‘P’ that starts the ‘PIGS’ has been the subject of a thorough marketing operation that displaced its position in the European imaginary, from being ‘the next to follow Greece’ to becoming the success story of adjustment under the Troika and the ‘good student’ of austerity policies in the Eurozone. In spite of more recent warnings by the IMF, according to which the meagre economic recovery of the last year stands on shaky ground and can be offset at the slightest rise in oil prices or interest rates in the international markets, Portugal is frequently incensed by the German government and Eurocrats of all sorts as ‘the case that went well in Southern Europe’. A slight increase in exports (including revenues from a tourism boom in Lisbon and Porto), a precarious (and fading) trade balance equilibrium achieved through massive cuts in public spending and wages, extra revenues from a privatization plan that brought in investment from State-owned Chinese companies and Angola’s plutocratic elites (real estate purchases also increased significantly after several licensing rules were ‘simplified’ and special visas were conceded to big investors), are usually referred as proof that expansionary austerity is possible and that the failure of the policies prescribed by Troika in Greece is due to endogenous causes, beyond the reach of the European Central Bank, the European Commission and the International Monetary Fund. Simplifications such as these are bound to find traction in the international media, just as happened around the time the Memorandum was signed, in 2011, when the Portuguese, like the Greeks, were portrayed as ‘lazy big spenders’ that would soon be joined by the rest of the Southern European countries.

The fairy tale of Portugal as a ‘success story’ – even if we ignore the massive social cost it implied, with poverty affecting over 20% of the population (reports of hungry children passing out at school became frequent) and unemployment reaching a historical high of 17% (in spite of successive attempts by the Government to disguise the numbers with all sorts of publicly funded internship programs), resulting in mass emigration of over five hundred thousand people (the precise number is difficult to determine, but it is reasonable to admit that it was equivalent to 5% of the population) – is based on a persistent attempt to forget that none of the targets included in the memorandum (namely reduction of the State deficit and State spending) were achieved and that the fundamental change occurred when the European Central Bank started buying Portuguese public debt without limitation, thus bringing interest rates down and ending the relentless attack carried out by financial investors against the Southern European countries’ sovereign debt since 2010. Massive changes in labour laws, extraordinary taxes imposed on retired people and wage workers, along with blind cuts across the public sector (mostly in the national health service and the public education service, while the police budget was raised) were undertaken without any visible impact on the country’s competitiveness, economic recovery or fiscal discipline, but the European Commission, the European Central Bank and the Eurogroup, who have been persistently harsh in their judgements of Greece and its need for further ‘adjustment’, have been more than happy to select whatever data best suited their political agenda, so as to invent ‘diligent student’ of austerity.

The political nature of this marketing operation is ever clearer if we recall its chronology: it was the quick electoral breakthrough by SYRIZA in Greece and PODEMOS in Spain, both underlining the immense failure of the politics of internal devaluation, that created the need for a success case to keep alive the narrative upon which austerity in the South is served to the public opinion and voters in the North of Europe. The particularly servile posture of the Portuguese government helped make this operation successful, in a deal that suited both sides, since its internal unpopularity and political isolation (just a year and a half ago it was under a barrage of criticism from even neoliberal hardliners, and no minister could risk walking the streets unless surrounded by a wall of police) could only be compensated through an equally deceiving narrative for domestic consumption, portraying its actions as a ‘painful but necessary remedy’ that would show positive results in the medium-term, just as both the European institutions and the ‘markets’ were starting to notice. By some sort of coincidence, this medium-term coincides with both the Portuguese electoral calendar (general elections for parliament will be held next October) and the Spanish one (late December), while unexpected (?) Greek elections made confrontation within the Eurogroup a major focus of international attention.

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A Discussion of Syriza’s Referendum in the Current Crisis

Supporters of Alexis Tsipras, leader of Greece's Syriza left-wing main opposition party attend his pre-election speech at Omonia Square in Athens Thursday, Jan. 22, 2015. Prime Minister Antonis Samaras' New Democracy party has failed so far to overcome a gap in opinion polls with the anti-bailout Syriza party ahead of the Jan. 25 general election. (AP Photo/Lefteris Pitarakis)

Where has Syriza taken Greece? Which are the forces at play in the restructuring of the Greek economy? And what are the conditions of its radical critique? What follows is a discussion of Cognord’s text “Changing of the Guards”, including TH’s critical remarks on that text, Cognord’s reply to these remarks and Ady Amatia’s comments on the questions raised in this discussion. TH and Ady Adamantia are members of Sic collective.

For full debate, see

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