Presidential candidate paints dark picture for 2006

PRESIDENTIAL CANDIDATE Cavaco Silva launched a stinging attack on the Socialist (PS) government of José Sócrates last week.

Addressing five chambers of commerce, the former Prime Minister outlined a unique situation in which a government, with a parliamentary majority, was suffering from the lowest level of public confidence in the past 25 years.

Cavaco Silva said that the government’s key role was to influence the economy by encouraging a meritocracy, instilling confidence and credibility. Instead, he hinted at a government that was failing to innovate, modernise, accept measures of austerity, take decisions and foster long-term policies instead of short-term speculation.

“In 1986, the period of growth and development gave the impression that Portugal would, in time, find a similar level of development to the countries around it. That hope has vanished in the past five years,” he said.

The economist said that, according to the latest forecasts, 2006 would be worse than 2005: unemployment would continue to climb, family debt would increase, the external deficit would be between seven and 10 per cent, foreign enterprises could abandon the country (perhaps a veiled reference to Volkswagen), Portuguese exports were losing value (20 per cent of market quotas) and national companies were opting to base themselves abroad.

“We all, as presidential candidates, recognise that the situation is critical and know that the influence politicians exert on the economy is vital for the country’s political stability, growth and evolution. The President has a role to play in brokering co-operation between economic and social institutions and organs of sovereignty.

“Political institutions influence economic growth and so ensure stability. If decisions are not made or are postponed permanently, uncertainty and lack of confidence increases,” he said, adding that Portugal had suffered four Prime Ministers in 3.5 years and four finance ministers in 12 months. “Political crisis affects social cohesion because when social tensions go beyond a certain level, production falls, innovation is harmed and reforms are put on ice.”

Cavaco Silva said he was a defender of social stability and hinted that, as President, he could foster better communication between the government and unions, help reconcile national and private interests, and diffuse social tension. Politicians such as the President were vital in forging social agreements, while fighting for non-postponement of important decisions affecting innovation and modernisation.

The former Prime Minister outlined six priorities: 1) Overhauling and reforming the justice and public administration systems. 2) Closing the development gap with Spain and other EU countries. 3) Improving qualifications and human resource training and development (only 33 per cent of students finish secondary school and 44 per cent abandon education without recourse to alternative training). 4) Re-organising Portugal’s territorial districts so that they functioned better. 5) Improving the environment. 6) Creating a more just and fairer country, which was capable of holding its own economically and politically on the international scene.

Injecting the key words “co-operation” and “mobilisation” into his speech, he said that Portugal must rapidly find the right path and concluded that the President had an active role to play in helping the Portuguese society to work together and head in the same direction. “This is the first time that presidential elections coincide with a grave economic crisis aggravated by short political cycles, but I believe that the Portuguese should not resign themselves to a climate of sadness, inaction and discouragement. Portugal can find its way,” he concluded.