Portugal’s President believes an all party consensus in the next legislature could lower interest rates as long as they all agree on austerity measures.
The last time the Head of State called for a political convergence was when Paulo Portas caused a crisis by threatening to lead his party from the coalition and bizarrely was rewarded by the Prime Minister Pedro Passos Coelho with the position of Deputy Prime Minister.
Cavaco Silva still sees a broad political union as a safer way forward for Portugal, as long as all parties agree that further austerity measures are needed. The problem with continuing the current austerity measures is that the population sees the measures as focused on the poorer in society while the rich get richer and the political classes remain insulated from the realities of life on the breadline.
The president said today that "the question of what happens post-Troika is decisive for the future of the country" and outlined the advantages of a political compromise between the parties in an ‘arc of governance.’
The Head of State insisted on such an understanding and said of the current status quo, "the trend has been positive, but I am convinced that if a medium term agreement is reached, which includes the next parliamentary term, interest rates could go lower than they have fallen in recent days," referring to today’s interest rate drop for 10-year bonds.
“It will be important for the Portuguese who may lose out in terms of jobs, wages, social benefits, and income distribution to realise that there is a political compromise between the forces committed to the adjustment program.” It may be important but it will not be helpful.
"It is very strange that Portugal is the country in Europe where a dialogue and an understanding between political forces is difficult.”
The President did not comment on the social impact of a future with more austerity, "The question of post-Troika is decisive for the future of the country so I decided to analyse thoroughly this phase of Portugal’s life in order to explain it to Portugal." "I wanted to be very strict and emphasise the importance of political commitment to the medium term so that Portugal can have better results in the future."
In the President’s opinion is it necessary to follow the evolution of the international economy, to have contact with our European partners, and to watch the markets so that the Government can decide about how Portugal leaves the bailout programme when called to do so. He ended with a warning and some advice, "we are being observed from outside. We are a country that still has a very high external debt. It is worth reading the regulations and European laws to know what challenges we are faced with in the future."
The President who stands by his statement that 'everyone’s opinion is important' managed again to avoid confrontation with demonstrator, this time outside the Nestlé factory he was visiting which was celebrating 90 years of business in Portugal. At one of the entrances about 30 demonstrators from the Trade Union of Aveiro were gathered with banners and slogans, calling for more social justice and less austerity. The car in which the Head of State was being driven managed successfully to circumnavigate the demonstration, as it did in Silves last week.
Comments
So what has changed in 800 years ? Why else did so many leave and spread across the world if not because of denied opportunity here?
When was it ever different in Portugal - and when, if ever, will it change ? Without the pressure to conform that comes from the EU - to control the elite, there will never be change !
Keep in mind last weeks post about Cavaco's relatives being shareholders of the 30 biggest Portuguese companies !
In reality it's a percentage game simply following the market trend in a sheeplike manner.
Both in Spain and Italy the rates will soon collide with those of the money printing nations of the UK and USA whilst even the Troika's bad boy and defector Greece is seeing a marked reduction in coupon.