Portugal: the impact of ‘anti-crises measures’ and the socio-economic situation
José Castro CaldasCentro de Estudos Sociais
Universidade de Coimbra
The three stages of the crisesThe financial stage (Mar. 2008 – Dec. 2008)
Main concern: stability of the financial system
The three stages of the crisisThe economic stage (Dec. 2008 – Feb. 2010)
Main concern: recession
The three stages of the crisesThe fiscal stage (Feb. 2010 - present)
Main concern: Stability of the euro
Anti-crisis measures in Portugal: stage I• Third quarter 2008: “Iniciativa de
Reforço da Estabilidade Financeira, IREF)”:• Acountability of financian institutions• Deposit garanties• State garanties to banks
Anti-crisis measures in Portugal: stage II• Jan. 2009: “Iniciativa para o
Investimento e o Emprego” (anti-cyclical, expancionay measures, 0,8 % GDP):• (Fiscal) support to home owners;• Anti-poverty allowances• Family allowances• (Fiscal) support to firms• Rehabilitation of public schools• Technologic infrastructure• Financial support to exporting SME• Emplument
Anti-crisis measures in Portugal: stage III• Mar. 2010: PEC I• May. 2010: PEC II• Sep. 2010: PEC III• Mar. 2011: PEC IV (rejected,
government resigns) • Apr. 2011: IMF/EU/ECB
Memorandum • June 2011: Elections (new majority)
Anti-crisis measures in Portugal: stage III• Fiscal consolidation:
– Increase tax revenue: tax rates, special income taxes, tax benefits
– Reduce public spending: cuts in public servant payroll, decrease pensions, increase public services access rates and regional coverage
• Privatization• Structural adjustment:
– Reduce unemployment benefits, generalize means testing, flexibilise labor legislation
The impact of anti-crisis measures (cyclical)
Trend 1: High public deficit
Trend 1: High Public Deficit
Trend 2: Increasing Public Debt
Trend 2: Increasing Public Debt
Trend 3: escalating unemployment
Trend 4: Decrease of the n. of people with access to protection
Trend 5: Increasing inequalities
Social Europe, 2011, The Distributional Effects of Austerity
Measures: a comparison of Six Countries, Research Note 2/2011
Trend 6: Delegitimisation of democratic rule• Opinion Poll Februray 2012:
– 62% (32 % in >September) desaprove the government
– 73% “there is no better alternative”– 40% “austerity will not solve the
problem”
Conclusion
• The scenario inscribed in these trends:
– Deep recession compromising the objectives of deficit and debt containment, and precipitating an unprecedented social crisis.
– Political or democratic representation
crisis with unpredictable consequences .