Business insolvencies ‘down’ for the first time since 2008

On face value, it’s a bit of good news: despite the fact the private bankruptcies have increased by 4% in Portugal this year, business insolvencies are down 10% – and this is the first fall registered since 2008.

According to Público newspaper credit must go to the government ‘special revitalisation’ programme PER, to which 1527 businesses and individuals have adhered – a more than threefold increase on figures for last year.

But of course, the question remains, are business insolvencies ‘down’ because there are simply less businesses left operating?

Two years ago, shortly before he died of cancer, Paulo Portas’ economist brother Miguel gave a revealing interview on a visit to the Algarve. A journalist and Euro deputy for the Bloc Esquerda, Miguel Portas explained the ethos behind what he called “the principle of creative destruction”.

“What’s on the table today and being decided everyday by the government under the auspices of the Troika is a generalised programme of impoverishment of the people. The idea – according to what’s called “creative destruction” in economic terms – is to bring everything down that doesn’t work. It’s the principle that impoverishment is virtuous. The whole strategy of taking a country into recession is a political option”.

And thus where we are today is further down that line of creative destruction.

Meantime, Público reports that private bankruptcies are on the up – “but only by 4.1%” which, again is relatively good news as “only in 2012, these cases had practically doubled” – and there is a special government drive to recruit 60 new “insolvency administrators”.