Portugal. "It has been a very terrible year," noted
Portuguese Prime Minister Pedro Passus Coelho without a whim
when his party gathered late last summer in the Algarve. He
could have added that it has been three terrible years for
Portugal and that more sacrifices will be required by the
Portuguese, before the country is out of the crisis.
Countryaah, Portugal's domestic policy and social life were marked
throughout the year by the economic crisis and the austerity
policy that the country's government has been forced to
receive from the world's emergency loans. It was in 2011
that Portugal received a conditional loan of EUR 78 billion
from the EU and the International Monetary Fund (IMF).
Portugal then became the third crisis country after Greece
and Ireland. In return, the country has been forced into
cuts in the public sector, labor market liberalization, wage
cuts and tax increases.
When the emergency loan was granted in the spring of
2011, the socialists ruled the country. After general
elections in the summer, Portugal received a bourgeois
coalition government under center-right politician Pedro
Passus Coelho, whose main task now was to meet the tough
demands set by the international lenders.
In 2013, unemployment rose to a record high of 16%, a
figure that for young people under 25 came to close to 40%.
At the same time, wages were lowered for those who worked,
resulting in a sharp increase in the proportion of
Portuguese who testified to a lack of money for life's
To reduce the social tensions that followed the crisis,
the country's President Aníbal Cavaco Silva, by virtue of
his powers, tried this summer 2013 to get the two bourgeois
government parties and the socialist opposition to work
together on austerity policy. But the socialist leader,
Antonio José Seguro, demanded a halt to the crisis policy,
and the president's attempt to unite failed.
Instead of a gathering across the block borders, during
the summer there was a split in the bourgeois coalition
government. Two ministers resigned, and a government
collapse seemed to stand at the door. Prime Minister Coelho,
however, managed to save the government by promoting one of
the defectors, Foreign Minister Paulo Portas, who was now
allowed to become Deputy Prime Minister responsible for
coordinating economic policy.
The result of the crisis in general and the high
unemployment in particular was that just over 100,000
Portuguese emigrated during the year, draining the country
on well-educated labor. Emigration is a particularly
sensitive topic in Western Europe's poorest country with a
past history of mass migration. It was only after the
Nejlikere revolution in 1974, when the dictatorship was
overthrown, that emigration ceased on a large scale.
After three years of austerity, popular dissatisfaction
has grown stronger, which was reflected in the results of
the municipal elections held in September. The bourgeois
government parties suffered great losses, while the
socialist opposition won important victories. But the
Socialist Party's success was limited by the fact that an
unusually large number of independent candidates voted and
won the votes of those voters who, in the light of the
crisis, wanted to show their dissatisfaction with all the
Despite dissatisfaction in society, the government was
able to get through its budget for 2014 through its
satisfactory majority in Parliament. The hope in Portugal is
now that the budget will be the last steel bath before the
country is out of the crisis. The budget aims to reduce the
budget deficit to 4% of GDP in accordance with the
requirements of the lenders. The cuts amount to EUR 4
billion and affect both salaries of public employees and
For the first time since 2010, some economic growth is
foreseen in the coming year, and Portugal hopes to be able
to borrow on the market even before the international
emergency loans expire in June 2014. Loan guarantees from
the EU rescue fund and the European Central Bank may be
needed with the requirements for continued tightening that
can then follow.