- #1
Tosh5457
- 134
- 28
I'm from Portugal, and I'm going to present our situation in the last years by not only my perspective, but from a perspective shared by many other Portuguese people, with backing off of data whenever possible.
As you may know, in 2011, after 6 years of having a socialist government, we were on the verge of bankruptcy and had to request external aid from the Troika (IMF, European Commission and ECB) to be able to pay short-term debt and avoid defaulting. This was actually after 14 years of socialist rule, only interrupted by 2 years of a social-democrat government, in which our economic growth was near zero (http://www.tradingeconomics.com/portugal/gdp-growth). None of the economic issues that foreign organizations such as OECD and WEF were pointing out as our biggest issues preventing growth, like excessive bureaucracy, tax rates, tax regulations and restrictive labor regulations were addressed, and they still rank right on top (http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf). Labor unions constantly did strikes requiring higher wages for public workers, where they were already paid a much higher salary than the private workers in the same job, and the minimum wage grew constantly even though there was no significant growth in productivity (http://www.voxeu.org/article/wages-and-productivity-eurozone - this is for 2011). The last socialist government (2005-2011) was marked by public spending above our possibilities, but which wasn't accounted in the deficit at the time by creative accounting, which was already made public (http://oinsurgente.org/2014/02/03/a-falacia-do-aumento-da-divida-publica/). Most of it were partnerships between public and private building companies, with contracts with ridiculous clauses, clearly made to help out the private companies at the expense of public money (http://www.publico.pt/parcerias-publico-privadas). This was just 1 of the corruption scandals in the last government, and the former prime-minister José Sócrates is in jail with an ongoing trial for corruption and other crimes. Another fun fact is that there were other 2 external government bailouts by the IMF since our democracy started in 1974, and these were also requested by the Socialist Party, both in the 80s. Mário Soares was the prime-minister at the time, and who now spends his days publicly defending Sócrates and visiting him in jail.
The social-democrats, the other big Portuguese political party, and in office since 2011, made many mistakes back in the 90s too, lead by Cavaco Silva, but since then have changed their policies to rigorous fiscal responsibility and less government intervention in the economy, something refreshing and that was needed for Portugal IMO. They also cracked down on the judicial system, which made it possible to lead many suspected corrupt politicians to the courts, such as our friend Sócrates, and which is something new in Portugal. The widespread notion here was that politicians can never go to jail, and this was actually pretty accurate - well, they're not immune anymore and some are deservedly in jail now. By the pressure Troika did, many necessary cuts were made, such as reducing the wages of public workers to the level of private wages, cuts in social spending, privatizing public companies in competitive sectors, among others. There are many policies missing though, such as a true reform of the private investment bureaucracy, which is still excessive and leads to many investment projects being closed down due to either a long time awaiting the decision of the various regulatory institutions or by bad regulatory decisions in one of the various institutions. This contrasts with most developed countries, where private investment is welcomed and where there is an effective and quick regulation. There were political reforms needed too that weren't made, so the politicians would have more accountability, because unlike in the American system, where each politician is attributed x number of people he represents, here they don't have to give justifications to anyone but the party.
Our elections will be in October/2015, and the Socialist candidate is António Costa, someone with tight connections to Sócrates and who will have Sócrates supporters inside the Socialist Party in his government, if elected. He's already promised he'll revoke the cuts on the public worker's wages, pensions, among other things he obviously wouldn't be able to fulfill. He also made statements such as "the actual government can't stand the socialists success", which was a very sad statement indeed since they bankrupted the country, and "no economy can grow if it let's the building sector die off". With the socialists history of corruption with that sector in costly government building projects, and him bringing back Sócrates crew, it's already obvious he wants to bring back the old socialist policies that lead us to this point. This guy is tied in the polls with the coalition of Social-Democrats + Conservative Party, so anything can happen.
Well, this was just to give you a glimpse of what's happening in this small country, on the corner of Europe, called Portugal :)
As you may know, in 2011, after 6 years of having a socialist government, we were on the verge of bankruptcy and had to request external aid from the Troika (IMF, European Commission and ECB) to be able to pay short-term debt and avoid defaulting. This was actually after 14 years of socialist rule, only interrupted by 2 years of a social-democrat government, in which our economic growth was near zero (http://www.tradingeconomics.com/portugal/gdp-growth). None of the economic issues that foreign organizations such as OECD and WEF were pointing out as our biggest issues preventing growth, like excessive bureaucracy, tax rates, tax regulations and restrictive labor regulations were addressed, and they still rank right on top (http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf). Labor unions constantly did strikes requiring higher wages for public workers, where they were already paid a much higher salary than the private workers in the same job, and the minimum wage grew constantly even though there was no significant growth in productivity (http://www.voxeu.org/article/wages-and-productivity-eurozone - this is for 2011). The last socialist government (2005-2011) was marked by public spending above our possibilities, but which wasn't accounted in the deficit at the time by creative accounting, which was already made public (http://oinsurgente.org/2014/02/03/a-falacia-do-aumento-da-divida-publica/). Most of it were partnerships between public and private building companies, with contracts with ridiculous clauses, clearly made to help out the private companies at the expense of public money (http://www.publico.pt/parcerias-publico-privadas). This was just 1 of the corruption scandals in the last government, and the former prime-minister José Sócrates is in jail with an ongoing trial for corruption and other crimes. Another fun fact is that there were other 2 external government bailouts by the IMF since our democracy started in 1974, and these were also requested by the Socialist Party, both in the 80s. Mário Soares was the prime-minister at the time, and who now spends his days publicly defending Sócrates and visiting him in jail.
The social-democrats, the other big Portuguese political party, and in office since 2011, made many mistakes back in the 90s too, lead by Cavaco Silva, but since then have changed their policies to rigorous fiscal responsibility and less government intervention in the economy, something refreshing and that was needed for Portugal IMO. They also cracked down on the judicial system, which made it possible to lead many suspected corrupt politicians to the courts, such as our friend Sócrates, and which is something new in Portugal. The widespread notion here was that politicians can never go to jail, and this was actually pretty accurate - well, they're not immune anymore and some are deservedly in jail now. By the pressure Troika did, many necessary cuts were made, such as reducing the wages of public workers to the level of private wages, cuts in social spending, privatizing public companies in competitive sectors, among others. There are many policies missing though, such as a true reform of the private investment bureaucracy, which is still excessive and leads to many investment projects being closed down due to either a long time awaiting the decision of the various regulatory institutions or by bad regulatory decisions in one of the various institutions. This contrasts with most developed countries, where private investment is welcomed and where there is an effective and quick regulation. There were political reforms needed too that weren't made, so the politicians would have more accountability, because unlike in the American system, where each politician is attributed x number of people he represents, here they don't have to give justifications to anyone but the party.
Our elections will be in October/2015, and the Socialist candidate is António Costa, someone with tight connections to Sócrates and who will have Sócrates supporters inside the Socialist Party in his government, if elected. He's already promised he'll revoke the cuts on the public worker's wages, pensions, among other things he obviously wouldn't be able to fulfill. He also made statements such as "the actual government can't stand the socialists success", which was a very sad statement indeed since they bankrupted the country, and "no economy can grow if it let's the building sector die off". With the socialists history of corruption with that sector in costly government building projects, and him bringing back Sócrates crew, it's already obvious he wants to bring back the old socialist policies that lead us to this point. This guy is tied in the polls with the coalition of Social-Democrats + Conservative Party, so anything can happen.
Well, this was just to give you a glimpse of what's happening in this small country, on the corner of Europe, called Portugal :)