Alex Zanardi 8.jpg

PM calls for cooperation with social partners

Portuguese Prime Minister Pedro Passos Coelho has called upon unions and social partners to discourage conflicts at a time of economic and financial difficulties.

Speaking at a PSD annual summer rally at Pontal in the Algarve on Sunday, the PSD leader reiterated his government’s pledge to cut back state expenditure and said that the country would endure a tougher new round of austerity cuts.

He stressed the positive feedback and analysis given by the Troika on Friday in Lisbon to the first three months of a range of structural reforms, budgetary cuts and austerity measures, but warned that the worst was yet to come.

He said that the most ambitious round of cuts to State spending in the last 50 years agreed in the Memorandum of Understanding between the International Monetary Fund (IMF), European Commission (EC) and European Central Bank (ECB) was yet to come.

Spending on health would be slashed by up to 15% and taxes would rise on energy bills by around the 15 to 18%.

But  Pedro Passos Coelho warned unions and other social groups not to create strikes and conflict which could only lead to stirring up social unrest.

He said that bosses and unions needed to united together in order to beat the economic crisis that the country was going through.

At the same time top Portuguese economist and President of Banco BIC warned that “Europe would not finance Portugal forever” and said that Portugal once again had to invest in agriculture, agro-industries, fishing, the primary, industrial and manufacturing sectors.”

“Reindustrialisation has to be the order of the day if we are not to repeat the errors of the past and end up in a situation that is even worse than the one we are facing today,” he said in an interview with Publico on Monday.

He said that the problem was that Portugal had stopped producing and continued consuming, importing rather than exporting and therefore increasing the balance of trade deficit.

The European Union was not a political and fiscal union, which meant that tax payers in Germany or France would eventually no longer be willing to finance Portugal´s external deficit.

The only way forward was for the country to increase its productivity and competitiveness and export more abroad.

Luís Mira Amaral said that the responsibility to change the course of things lay not only with the State but with society as a whole.

Civil society could not stand back and expect and wait for the current government to wave a magic wand and do everything, other than create a positive framework for growth through debureaucratisation, reforming the public administration, and getting rid of public companies and services that were financially unsustainable.

On the other hand reforms were needed in the justice and public administration systems, the local authorities and in the employment markets in order to “escape the current scenario.”

Refusing to accept the doomsayers predicting the end of the Euro, he said that the Portuguese had all the answers in their own hands and needed to fulfil the Troika agreement to the letter, to do otherwise would be “dramatic“ he warned.