Seventy wise men in Portugal have published a manifesto for changes in this country. They suggest prolonging the interest repayment installments and dropping the interest rates payable on Portugal’s loans, as in Greece.
The Dutch-Swedish Professor Stefan de Vylder and Jack Soifer propose the same approach, changing part of the country’s debt into credits to be used by the creditors’ clients, e.g, German, British and Dutch corporations would be issued vouchers to exchange for imports from Portuguese companies. This would raise the competitiveness of Portuguese companies and bring jobs.
President Cavaco Silva said recently that it will be 22 years before Portugal can start breathing again. Out of eight well-known economists interviewed recently by the weekly magazine Expresso, 3 said Portugal will never reach the EU limit for public debt of 60% of GNP, 3 others sadi that it will take 40-50 years and 2 bankers believe it will take 25-32 years.
The Troika proposed structural changes such as the updating of education, health, transportation, justice, and equity for working and retirement benefits between private and public employees. Not bad! But what we actually saw was a focus only on the labour and financial areas which served to crush groups of citizens with the weakest unions and associations, and only superficial cuts in the costs of justice and health without tackling the causes - these cuts only treated the effects of old-fashioned governance and its lack of control of public expenditure.
One example: in December 2013 Portugal had 279,000 registered unemployed over 45-years old. For two years the government had two programmes for them, the TSU and Impulso which together resulted in 6,740 jobs, some 2.3% of its target.
Finanças set out to reduce tax evasion, but focused on 200,000 SMEs whose total tax evasion costs is around €1.2 billion and did almost nothing on tax evaders who use offshore tax havens, an estimated €70 billion.
Not only in Portugal, also in many EU-Mediterranean countries citizens don’t trust the Troika, neither do they trust the bureaucrats in Brussels and Frankfurt who were warned in 2007 of the risks of a crisis and did nothing. Out of 7 million Portuguese electors, less than half voted in the European Parliamentary elections five years ago.
Neither the Troika nor Portuguese politicians want to tackle the root causes of this long recession, this would need something akin to the Marshall Plan after WWII in order to create jobs and welfare. They want to keep the high profits for a very few corporations, those which give their political parties enough euros to keep them in power and continue the current system.