Portugal is preparing itself to no longer receive benefits
The 19th of May Portugal will no longer receive help from the International Monetary Fund (IFM), the European Central Bank (ECB), and European Commission (EC), which form the group that oversees the 78-billion-euro loan that saved the country from a catastrophic economic recession
By Leyre Latorre
Portugal will recover the control over the country that it had lost upon asking for assistance. The crisis has demonstrated that there are imbalances within the Eurozone. There still aren’t mechanisms to correct those imbalances; especially for countries that are in the periphery of Europe like Portugal. The country is suffering from having adopted the euro as its currency.”Prices increases everyday but still get the same money or less”, says Irina Nesterchuk, a ucracian girl who has been living in Lisbon for twelve years.
“People don’t want to maintain the current budget restraints much longer. They say it will take 30-40 years to get rid of the country’s debt. It’s difficult to tell people that they’re going to spend another generation stretching their money,” says Francisco Coutinho, an International, Media, Constitutional and European Law professor from the Instituto Superior de Ciencias Sociais e Políticas in Lisbon, with a Phd in European Law. There needs to be a different framework for the EU – especially regarding the economic policies of the EU. That would include some economic transfers from the centre to the periphery; however this would also entail a different EU political structure and most likely some loss of sovereignty.
“The Portuguese are starting to question their affiliation in the EU as it has ceased to bring financial prosperity,” explains Francisco Coutinho. It has brought about civic problems and the Portuguese people can’t see an immediate exit from the crisis.”Government is raising taxes, decreasing salaries and firing people. And this is not working for the people. It is true that the government now has less debt, but it is not working for the people”, explains Mafalda Nobre de Carvalho who works for H&Y in Lisbon.
It has been proved through research that it is impossible to have an internal market with different currencies. The problem is not in having a common currency, but rather in how the currency was designed. “They made the currency with the economic policies of many different member states. Each member state did what was best for themselves without thinking of the consequences of the politics,” remarks Francisco Coutinho. It remains to be seen if the European Union can exist with this political structure and the common currency. It is now widely agreed upon that more integration is needed in order for the EU to function properly. Otherwise the imbalances that occurred in the past will repeat themselves.
“The decision to accept the aid package was inevitable. What Portugal needs to talk about now is the future”, says Francisco Coutinho. They need to be very strict in order to not get into trouble again, because the markets don’t usually forget the economic past. Portugal has learned the lesson. The aid package came with some unfavourable conditions that turned out to be quite necessary and helpful. For instance the budget of the Portuguese state became more transparent and people realised that they can’t believe and accept as true everything that politicians say; but rather they must demand more. In spite of everything, Portugal has come out of this situation stronger than when they went into it.