Brussels cranks up pressure on Portugal

As the slick “Burberry economist” Yanis Varoufakis gives an explosive interview in Público today, Brussels is cranking up the pressure on Portugal’s political ‘leaders’.

The ‘caretaker’ government’s attitude that now is not the time to present a draft plan for next year’s State Budget has cut no ice whatsoever, reports Diário de Notícias.

Whether the centre-right coalition manages to form the next government or not, Brussels wants to hear the former executive’s “interim plans” for 2016, according to pre-defined time scales – which effectively means “now”.

Small print within the EU’s “stability and growth” programme “establishes well-defined proceedings that apply to a member state with a government that is not in full use of its powers”, a source told the paper in response to Portugal’s bid for “time to sort out the political situation” (see: Government delays sending Portugal’s draft budget to Brussels).

“In such cases, the outgoing government must submit a budgetary plan based on an unaltered political scenario, while the new government should submit a complete budgetary plan when it takes up its functions,” it added.

“As the time limit for this has just expired (yesterday, Thursday, was the last day),” the source stressed Brussels was “hoping” to receive Portugal’s financial forecasts “without any further delays”.

Anyone who has noticed the thinning hair of acting prime minister Pedro Passos Coelho should now watch carefully.

As the pressure builds towards the promised decision over the form of Portugal’s next government “next Wednesday” (see Cavaco gives parties until October 21 and 22), national media reports that Socialist leader António Costa has been gathering support for a left-wing government through meetings in Brussels, where president of the European Parliament Martin Schulz has actually said he “hopes” Costa goes on to form the next government.

“It is absolutely normal” for Costa to be trying to win European left-wing support, added Schulz. “I hope my friend António Costa becomes the prime minister,” he added. “I believe that it is comprehensible.”

As Passos Coelho holds on to his hair, Greek firebrand Yanis Varoufakis – the former flamboyant minister of finance who had everyone in a lather before he stood down – has been telling Público that “Portugal is as broke as Greece”.

The country’s debt is unsustainable, he said, and what has happened nationally over the last 18 months cannot be characterised as a recovery. “There is no recovery in Portugal,” he stresses in today’s interview.

“The Irish say they are not like the Portuguese, the Portuguese say they are not like the Greeks, the French say they are nothing like the Spanish, the Germans say they are not like the French. This is a clear reflection of the fragmentation that Europe is going through. The truth is that we were all taken by the same crisis. Greece and Portugal are very similar in many important aspects, and quite different in others. But the similarity on which Portugal needs to concentrate is that both economies have been caught in a trap of debt and deflation which we can’t escape simply through a better form of governing from the State.”

As Económico concludes its summary of the interview: “In this context, the former minister believes citizens should create a pan-European movement to say no to the way the European Union is governed”.

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