Portugal's president, Cavaco Silva, today showed no mercy to two advisors who disagreed with his point of view, he sacked them.
The advisers to the Presidency, Vítor Martins and Sevinate Pinto made the tactical error of signing a manifesto, among 68 others, calling for the restructuring of Portugal’s debt.
The two consultants signed the document without having previously informed Cavaco Silva of their intention to do so. They ‘resigned’ according to the order signed today.
The former Minister of Agriculture, Sevinate Pinto, was an agricultural consultant. Vitor Martins, a former Secretary of State for European Affairs when Cavaco Silva was a mere Prime Minister, was a consultant for European Affairs.
The signatories to the document include some of the country’s top businessmen, trade union leaders, academics and constitutionalists who support the move towards a ‘responsible debt restructuring’ without which "the state will continue to be entangled and hampered in a vain attempt to solve the budget deficit and public debt only by means of austerity."
The proponents predicted how this will result in the ‘degradation of service provision from the state, falling demand, a moribund economy, greater job insecurity, the emigration of young skilled workers and even more unemployment.’ The document called for an extension to Portugal’s bailout debt of 40 years or more with lower average interest rates.
The group of 70 agree that this restructuring should be done within the EU theatre, even if it against Germany’s wishes, adding, perhaps unnecesssarily, that the same was done for Germany after World War II.
The Prime Minister joined the political fray today and totally ruled out any sort of debt restructuring scenario, "No way, this is totally out of the question."
Passos Coelho expressed astonishment that such well informed personalities had raised the issue at a time when Portugal is returning to the markets and growth. "They are the same peple that spoke of a recessionary spiral,” said the prime minister, drawing applause from his audience the Ritz, "This subject is off the agenda, I have difficulty in explaining it."
Pointing out that one third of Portuguese public debt is in national hands, Passos Coelho said that restructuring these bonds would be masochism. As for extending the repayment period and lower interest rates on the Troika loans, which the manifesto advocates, the PM said this already had been done and that to ask for the same leeway as Greece “would be absurd.”
The Ministry of Finance sensibly declined to comment on the manifesto but the young Minister for Regional Development, Poiares Maduro, chipped in that "any debt restructuring option would be extremely detrimental to the country," and concluded that this sort of action would just raise the costs of state funding when Portugal returned to the international funding markets. The lad will go far.
