Portugal risks losing golden opportunity.jpg

Portugal risks losing golden opportunity

By: Chris Graeme

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PORTUGAL’S TRANSFORMATION in the past 30 years has been nothing short of dramatic and radical. However, since 2000, the country’s progress has been less than enchanting and now it has become the sick man of the European Union.

The next three years of Prime Minister José Sócrates’ reforming socialist government will be crucial and, although there are encouraging signs in terms of the country’s manufacturing orientation, there are also disturbing signs that its reforms risk grinding to a halt.

Dr. Nicolau Santos, deputy director of weekend newspaper Expresso, in his keynote address to Swedish, Finnish, Belgian and Luxembourgian Chambers, outlined the general economic outlook for Portugal in 2007 and highlighted where the present government risked getting bogged down in a quagmire.

Despite economic growth forecasts being at a slow 1.8 per cent, Portugal’s public spending deficit was likely to be brought down to 3.3 per cent of her GDP, and taxes are likely to remain the same (21 per cent VAT and 20, 40 and 42 per cent Income Tax respectively).

Exports abroad have shown some recent signs of picking up in technology, machinery, chemicals and electronic goods, with healthy sales to the US, Angola, China and Singapore. However, Dr. Santos said it was worrying when key figures in the government have started to announce that public administration reform was not as crucial to the nation’s economic indicators as was once thought, when clearly they were vital.


“Many of the reforms are stuck in courts because of actions brought by unions whose members are the targets of those reforms,” he said. The result is that it is the courts that are deciding government policy rather than the government. This inversion of values, coupled with the present scandal surrounding Sócrates’ university engineering qualifications, was threatening to paralyse the government into inaction, a situation which would only be made worse when Portugal took over the running of the European Union in its rotating presidency from July.

The government also did wrong, in his opinion, by stating that people hired by the state to do specific tasks could not earn more than the PM, meaning the best consultants would not be attracted to improving the better governance of the country.

It was vital that Portugal continued her reforms of the public administration and central government apace, not letting them grind to a halt because of the EU Presidency.

Ota needed to be decided “once and for all” and the government and media needed to think about more pressing problems other than whether Sócrates’ degree was issued on a Sunday or if he was calling himself an Engineer before he had the diploma in his hand. “What can the country gain by this controversy? Nothing. The result is that the government has been at a standstill for a month and Portugal does not, once again, need a Prime Minister incapable of doing anything until the elections in 2009,” he concluded.

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