Socrates has left,

Portugal – The Portuguese Prime Minister Jose Socrates resigned on March 23, after failing to pass austerity measures. In his appeal to the nation he declared: “Today the opposition parties deprived the government of any possibility to continue governing the country. Irresponsibility trumped national interests and the sense of national duty. The political crisis could have been resolved if the parties had demonstrated good will.” Thus, he believed there was a chance to avoid the present political crisis. “Some might think that they won this political game… No, today the country lost and nobody won from my resignation,” remarked the prime minister.

Portugal was one of the first European countries to be affected by the global crisis. Though the economies of most European countries started showing positive dynamics back in 2010, Portugal, together with Greece and Ireland, has remained a headache for the EU. The reputable website Business Insider estimates that the abovementioned countries are among the top five in the world to be threatened by default. Portuguese financial instability is mainly linked with the country’s vast national debt, notably the necessity to pay off 20 billion euros of credit in 2011.

The adoption of the Stability and Growth Pact, whose text was approved during a meeting of the Portuguese prime minister with European leaders, held on March 18, was aimed at the reduction of this deficit. The main conditions for providing Portugal with financial support from EU countries included a freeze on state pensions, recapitalization and deregulation of banks, tax hikes and budget cuts. As the previous three packages, which foresaw similar measures, didn’t bring any positive effects and only increased the financial load on the people, the prime minister’s attempt to realize one more similar plan was the last straw. The Portuguese President Anibal Cavaco Silva and the leaders of the opposition parties expressed their indignation with the fact that Jose Socrates hadn’t informed them about his readiness to make significant concessions to their European partners and in fact had independently committed to the pact. After the debate in the parliament, which lasted several days, the majority didn’t support the set of measures, forcing the prime minister to resign.

Now Portugal is going to hold special elections, possibly as early as in May. While six different parties are represented in the Portuguese parliament, the Socialist and Socialist-Democratic parties remain the main political forces. Jose Socrates, who headed the government for six years, belongs to the Socialists, which will reduce the parties support. The unsuccessful policy of his government led to the country’s largest protests in 37 years, when approximately 300,000 people took the streets on March 19. Their main complaints about the prime minister were the shift of the tax burden on less socially protected people, the preservation of enormous taxes for the maintenance of executive personnel, and nepotism. They also believe that the purchase of the troubled BPN, which represents big business and had financial obligations of 1.9 billion euros when it was bought in 2008, was a mistake. The deficit growth from 1.1 percent to 8 percent is linked with the necessity to recapitalize this bank. Plans to build an express TGV railway connecting Lisbon to the Spanish capital provoked dissatisfaction as well. The grandiose construction, estimated at 7.8 billion euros, in the current conditions is seen as yielding to the lobbying efforts of big construction companies.

Although it is expected that the special elections to the parliament will change the government in the country and a Social-Democratic party representative will come to power, the Portuguese economy is unlikely to recover soon. The country is up to its neck in debt to the EU and the IMF, which is why the people won’t avoid unpopular measures such as tax increases or benefit reduction. The Portuguese understand this and have come to perceive the crisis in their country as an objective reality, but in their turn they demand that state expenses be reduced in such a way that officials and big business also bear the related costs, not just the poorer segments of society.