Portugal needs stability  

news: Portugal needs stability  

PORTUGUESE President, Jorge Sampaio, called for the restoration of political stability in his New Year’s address to the nation. Outlining what the country’s objectives should be for 2005, he mentioned sound finances, improved productivity and increased competitiveness as the main issues.

“The restoration of political confidence is the only way out of this political, social and economic crisis,” he said. The President, who believes the nation is facing a “critical situation”, focused his comments on financial and economic health – or the lack of it. He asked the various political parties to show understanding and co-operation, while appealing to the Portuguese to make sure they vote in the forthcoming February election. “We’ve got to restore political stability,” pleaded Sampaio, who dissolved parliament at the end of November. The President stated his decision was based on the “substantial instability and lack of prestige in the government, its members and institutions”.

“I had to face an unforeseen succession of government crises and my duty is to safeguard, by all constitutional means possible, the maximum political and institutional stability,” he underlined. “I did this (dissolving parliament) taking into account the national interest, because something had to be done about the worrying economic and budgetary situation that is seriously threatening the country’s development.”

Portugal needs to find a solution to maintain the budgetary deficit at less than three per cent of Gross Domestic Product (GDP) as laid down in the Stability and Growth Pact (Pacto de Estabilidade e Crescimento).

At the root of the problem is the state’s continued inability to collect the necessary taxes and tackle tax fraud and evasion. The nation has also seen its export productivity plummet by more than five per cent since 2000, while virtually every other EU country has seen its exports increase steadily.

Portugal is also losing its competitive edge to newly signed up EU ‘tiger economies’ in Eastern Europe, as well as facing a textile industry meltdown as it fails to keep apace with cheaper labour and manufacturing costs in China, Brazil and India.

Not only this, successive governments have not had the courage to seriously cut back the over-staffed public sector, which employs around eight per cent (800,000) of a population of 10 million.

“I am certain that the legitimate, democratic election of the next parliament can and must create the necessary political conditions to decisively respond to this current situation,” he said.