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Costa downplays damning OECD report as clouds stack up on Portugal’s horizon

In a customary show of bravado, Portuguese prime minister António Costa has dismissed the latest criticism of his government’s economic plans, saying “forecasts are forecasts”.

The fact that the OECD thumbs-down follows many others from different quarters appears not to concern the Socialist leader who was in top form yesterday visiting a children’s school for International Day of the Child.

But the truth is that almost all the criticism centres on the same issues: the fact that the government has its sums all wrong, and that economic growth is simply as unlikely as pigs suddenly sprouting wings.

The OECD ‘bombshell’ has been interpreted in different ways by different news media.

Dinheiro vivo concentrates on the fact that employment will be ‘destroyed’ (once again) “within three years”; Público on a new drop in growth forecasts (from 1.6% to 1.2%) and Jornal de Notícias on the absolute requirement for the Plan B (that Costa and his finance minister keep saying won’t be needed).

With public sector workers returning to a 35-hour week from July 1, Opposition parties are predictably forecasting the worst.

But what is possibly more worrying now are the voices of dissent coming from within Costa’s own party.

According to a report in Observador, for every day that Costa remains at the helm, 14 Socialist party militants (supporters) are letting their memberships lapse.

The source for the article is João Galamba, a supporter of the man Costa defeated in his bid for the leadership, former PS leader José Seguro.

But if Galamba is right, Costa could well be smiling his way towards a showdown.

A looming ‘test’ – separate from any hurdles set by Brussels – will be next year’s municipal elections, says Galamba.

If the PS does not hold on to the 150 boroughs it already has, “Costa should resign, and assume the responsibilities he did not assume at the elections”, the former MP continued, stressing that the controversy caused by the government’s cutting of funding to private colleges, could all be part of a strategy to “keep people’s minds off the economy”.

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