The success of the turnaround in Portuguese state finances and the effective implementation of the 2014 budget meant that austerity was becoming ever less a national priority, was the key opening theme of Prime Minister, Pedro Passos Coelho’s fortnightly appearance before parliament late last week.
But a few days later, Socialist Party leader António Costa, citing latest figures, said that the “impoverishment” of Portugal is a statistical reality and that the government strategy of imposing austerity to encourage growth and to pay the public debt “failed”.
But Prime Minister Passos Coelho was rather pleased with the figures he was shown.
“I believe that the results presented in 2014 strengthen our conviction that Portugal will be able to bring in its budget at below three percent this year and this measure clearly demonstrates the benefits and the merit consequent to a determined strategy to stabilise the state’s financing and accounts and enable us to now focus our concerns on policies of growth and employment rather than policies of containment,” Passos Coelho told parliament.
The head of the coalition government added that a balance still needed to be maintained between growth and responsibility towards the future before concluding that “austerity measures were taking ever less relevance with our capacity to grow becoming ever more renowned.”
This comes in the wake of the Economy Minister António Pires de Lima having trumpeted last Thursday’s unemployment figures as contradicting those who “stood in the way of creating wealth in Portugal.”
With reference to the unemployment rate falling 0.1 percent to close December at 13.4 percent, Pires de Lima maintained that “the positive evolution in economic activity has corresponded to a gradual but consistent reduction in unemployment” with 100,000 fewer people unemployed than a year earlier.
Speaking at the Euronext Lisbon Awards on Thursday evening, the Economy Minister stressed that the year-on-year fall of unemployment from 15.2 percent to 13.4 percent meant that “this wave of depression (…) bears no direct relationship to the economic moment that we are experiencing that is positive and dispels the most pessimistic scenarios set out for our country.”
Addressing a lunch with party members in Tavira on Sunday, opposition leader António Costa said that a new policy was needed and that the PS should be proud of its history, the day it celebrated the 40th anniversary of its legalisation [1 February 1975], and “mobilise to fight for an alternative” to the austerity imposed by the centre-right coalition government.
“This government wanted to convince the country it had a strategy, a strategy that with a great reduction in rights, with a great austerity programme, with collective impoverishment, we would manage to re-launch the economy and pay the public debt. We know today that there is one thing they have managed, no-one has any doubts that they have managed to impoverish the country”, António Costa said.
“And they really managed to impoverish the country because year after year the risk of poverty index has been going up in Portugal”, he added, recalling that two days ago the Portuguese National Statistics Institute (INE) calculated that “20 percent of the Portuguese population was at risk of poverty”.
António Costa also used INE to say that “in 2014, private and company investment went down” and “in 2015 it is going to fall even more”.
“The truth is that they did not control the debt, the debt is continuing to increase and after three years of massive taxes we have the economy paralysed, with increased poverty and a rising debt”, he said.