Portugal's Summer Of Disaster


The fado sounds more poignant than ever in the winding cobblestone streets of Lisbon. Portugal's mournful guitar style has become soundtrack of a country of 10 million on the brink of a colossal disaster.

“If I had been younger I would have left.” The owner of the small seafood shop on Lisbon’s Alegria Street could hardly hide the sadness in her voice. “Young people are leaving, those of us who are older are staying,” she said.

These days it’s not only the summer temperatures peaking in Lisbon – social tensions are also running hot. Posters calling the young to join to join the greves – the near-daily strikes – are glued to the magnificent azulejos tilework. Banners hang over the squares where the young and the old discuss Portugal's “situation”, which seems to be nearly beyond repair.

A banner encouraging people to join the general strike. Photo by Antonio Castillo.

The economy has contracted by a further 2.3 per cent this year, double what was forecast last September. Unemployment, at 17.8 per cent, is only surpassed by Greece and Spain. And the unemployment of young people – 42.5 per cent – is a national disaster that not even the mournful fado could express. 

The young are leaving en masse for Germany, England and to those countries that once were part of the mighty Portuguese empire: Brazil and Angola.

The conservative Prime Minister Pedro Passos Coelho encouraged the exodus last year when he advised young people to go abroad. According to the Institute of National Statistics more than 58,000 young Portuguese below 34 have left. Coelho promised that by the beginning of summer 90,000 young Portuguese would be employed, so far only 10,000 are.

In these festive summer days the target of the massive protests is the “troika,” who set the terms of the country’s financial bailout: the European Union, the International Monetary Fund and the European Central Bank.

The troika’s bailout of €101 billion, sought and negotiated by the previous Socialist government, came with severe austerity provisos. The government showed little resistance. As The Economist put it, Portugal became “the best behaved of peripheral Europe’s bailed out countries”. 

The conditions of the bailout are the most wide-ranging in Europe: brutal tax surges, drastic cuts to spending, reduction in public and private salaries, cuts to unemployment subsidies, welfare, education and health services. It seems the government is “promoting impoverishment, especially of the middle class, and cheapening labour,” argued the influential newspaper Diário de Notícias.

To add insult to economic injury, Coelho's government is in total disarray. Last week Portuguese politics became a soap opera, after the resignation of Foreign Minister Paulo Portas and Finance Minister Vitor Gaspar, the driver of the troika’s austerity program.

Incredibly, Coelho didn’t accept Portas’ resignation and he was hastily reinstalled, this time as deputy minister. The government came out from the crisis utterly debilitated and discredited.

The infighting between the two politicians is leading Portugal down a similar path to Greece. Investors don’t like instability; borrowers will be keeping an eye on rating agency Standard and Poor's, which last week said it could further slash Portugal’s credit rating.  

The squares of Lisbon, like other cities in Portugal, are packed with protestors. Leading the Portuguese summer of anger is Que se lixe a Troika (Screw the Troika), an eclectic non-partisan group of 130 organisations that represent a wide range of social actors, including public servants, students, teachers, pensioners and artists. 

They have brought back to the streets of Portugal Grândola, Vila Morena, the old pro-democracy hymn of the 1974 Carnation Revolution, that ended the dictatorship of the so-called Estado Novo (New State).

Then a symbol of the street struggles for democracy, these days it’s a symbol of the struggle for a better life. It seems that even the young have taken to heart its old lyrics: O povo é quem mais ordena (it is the people who order).

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