Current issues in Portugal

2009 was a pecu­liar year in Por­tu­gal, with the coun­try focused on an ongo­ing elec­toral process as three gen­er­al elec­tions (Euro­pean, nation­al and local) took place with­in a short 4‑month peri­od between April and Octo­ber 2009. At the same time, the impact of the eco­nom­ic down­turn became more vis­i­ble with a clear increase of unem­ploy­ment fig­ures and of the num­ber of com­pa­nies becom­ing insol­vent.

The polit­i­cal land­scape has also suf­fered a slight, but sig­nif­i­cant, change. After hav­ing lost the Euro­pean elec­tions in June 2009 to the main oppo­si­tion par­ty (cen­tre-right PSD), the Social­ist Par­ty man­aged to win the nation­al elec­tions in Sep­tem­ber 2009, although with­out a major­i­ty in the par­lia­ment, as was the case dur­ing the five pre­ced­ing years. In the absence of real con­di­tions for the set­ting-up of a coali­tion gov­ern­ment, the Social­ist Par­ty and Prime Min­is­ter José Sócrates were “forced” to form a minor­i­ty gov­ern­ment and to nego­ti­ate the bud­get for 2010 (which was final­ly approved at the end of April) and the new Sta­bil­i­ty and Growth Pro­gramme .

Pub­lic debate in Por­tu­gal remains very large­ly focused on the eco­nom­ic cri­sis and on the mea­sures which are cur­rent­ly being adopt­ed in the frame­work of the SGP, fol­low­ing an agree­ment between the gov­ern­ment and the main oppo­si­tion par­ty (PSD). The increase of tax­es (VAT, tax rev­enues) and the severe cuts in the bud­get (affect­ing, in par­tic­u­lar, social ben­e­fits) togeth­er with a ris­ing unem­ploy­ment rate and a gen­er­alised down­grad­ing of Por­tuguese pub­lic debt by the main rat­ing agen­cies are still in the news­pa­pers’ front pages, although the eco­nom­ic indi­ca­tors for 2010’s first quar­ter were a lit­tle bet­ter than expect­ed. Recent­ly, the Por­tuguese cen­tral bank reviewed its fore­cast for 2010, but already antic­i­pates that 2011 will be a year of poor eco­nom­ic growth as a result of the severe con­straints intro­duced by the ESP.

From now on, atten­tion will be main­ly direct­ed at the evo­lu­tion of the polit­i­cal sce­nario and, in par­tic­u­lar, to the abil­i­ty of the minor­i­ty gov­ern­ment to sur­vive the cur­rent eco­nom­ic and social cri­sis in a moment where the com­ing pres­i­den­tial elec­tions at the begin­ning of next year pre­vent any pos­si­ble dis­so­lu­tion of the par­lia­ment. An increas­ing num­ber of ana­lysts pre­dict that a major cri­sis will occur by the end of the year dur­ing the bud­get dis­cus­sions, and some senior states­men invoke the need for the two main par­ties (the Social­ist Par­ty and the PSD) to make a gov­ern­men­tal coali­tion in order to estab­lish a sta­ble and durable solu­tion which none of them seem to accept.

Inter­na­tion­al mat­ters are still dom­i­nat­ed by con­cerns over the cri­sis and the effec­tive­ness of the respons­es which were adopt­ed. Although there is still room for mat­ters of tra­di­tion­al inter­est to Por­tu­gal, like the tra­di­tion­al rela­tion­ship with African Por­tuguese-speak­ing coun­tries and Brazil, such mat­ters tend to be eclipsed by the inter­nal sit­u­a­tion.

The reports focus on a report­ing peri­od from Decem­ber 2009 until May 2010. This sur­vey was con­duct­ed on the basis of a ques­tion­naire that has been elab­o­rat­ed in March and April 2010. Most of the 31 reports were deliv­ered in May 2010.

The EU-27 Watch No. 9 receives sig­nif­i­cant fund­ing from the Otto Wolff-Foun­da­tion, Cologne, in the frame­work of the ‘Dia­log Europa der Otto Wolff-Stiftung’, and finan­cial sup­port from the Euro­pean Com­mis­sion. The Euro­pean Com­mis­sion is not respon­si­ble for any use that may be made of the infor­ma­tion con­tained there­in.