Large crowds marched today in the key cities and towns of
Portugal against the austerity measures the government is implementing. The key
feature of these manifestations was their peaceful nature. People have shown,
once more, that they can be on the streets and behave responsibly.
Many of the protesters could be defined as middle class
families that are going through a process of impoverishment. For many of them
and for many years their living standards were based on a fiction: that the
country could afford a level of public expenditures that was well beyond the
means of the economy. With the international financial crisis this fiction
could no longer be sustained. The state could no longer borrow in the international
markets at low rates of interest. To be able to finance the public sector and
adjust spending to the real possibilities of the economy over a short period of
time, the state had to look for funds coming from the IMF, the ECB and the
European Commission. These monies came with strings attached, as expected. And
that hurts. It hurts even further because the government has realised – but cannot
explain it properly and clearly, for reasons that are beyond my understanding –
that the long term sustainability of public expenditures calls for further
cuts, particularly if one takes into account the fragility of the economy and
the very low rate of productive investment that has been recorded so far.
In a country where the state was the true engine of the
economy – unfortunately the private sector had not been able during the last
two decades to take off and expand; it remained too dependent of state projects
and orders and largely linked to political patronage – if public expenditure
goes significantly down most of the economy tends to collapse.
The point is to get as many investments from outside as
possible. My hope is that today’s popular civism be perceived by those
potentially interested in investing in Portugal as an encouragement to do so.
