Portugal needs a reshaping in policies which should account for the demands of every relevant actor. By doing so, Portugal will find the right and permanent path it desperately needs, without jeopardizing the ulterior political stability and not detaching from Ireland. By doing so, the Euro will continue to be issued by the Bank of Portugal and Portugal will eventually find its way through the crisis nested in the Eurozone.
The pre Political Crisis.
During the past weeks many have been said regarding a potential political crisis which would be mounting up in Portugal, triggering the reaction of foreign entities and the President of the Republic to try to apply pressure on the moderate opposition to cool off some fuzz on elections.
Supporting evidence considers:
- The diverging path of the socialist party (PS), which has signed the financial assistance program, have agreed on it ever since and now tries to appear as an alternative to economic suffering;
- The constitutional veto to some austerity measures approved in the 2012's national budget;
- Demands of changes in the ministries, including Economics, announced publicly by the smaller coalition party (CDS-PP).
The previous political stance could be expected if the assistance program would not result in an economy's rebounce and it is expected to assume more stringent terms, until an electoral climax, if the economy further plunges specially in terms of unemployment.
This deteoration is even more severe when the predictions fail one after another, in a clear demonstration of lack of prudence from the rulers which should preserve some people's confidence by not failing numerically in their sayings.
The Law of Attrition.
It is true that despite the grimness of the political stance, the public demonstrations have been less powerful than before. What was seen some months ago as a pre-revolution period, due to the singular agressiveness of the demonstrations, its plural representation, and the riots which forced the police forces to impatiently avoid confrontation at all costs, is now resumed to a confrontation in the political arena, without a compelling action in the streets. It is a fact that people is fatigated from an everlasting crisis without signs of weakeness, but it is also a given that an alternative is not clearly seen by the majority.
With all these in perspective a major consistency should be detached. In Portugal, the opposition is made measure wise and not system wise:
- The severe public demonstrations against the executive appeared when a social security copayments change would easy the bill for firms at the expenses of workers and with time they ease off, frustrating the efforts of unions to capitalize the unusual turnout;
- Two consecutive constitutional vetos on the previous two budgets were focused on forbidding the increase in the people's tax bill but allowed a cut in expenditure of the state. It posed a risk to the political stability but clearly contributed to a new path where expenditure cuts are the unique acceptable way;
- In a singular joint of voices the smaller coalition party and the stronger opposition party, with different and logic degrees of moderation, demanded changes in the Government and policies, focusing also on making the economy grow and not just to cut the states size.
Jointly, the scenario is explosive but is not exploding. In fact, all the dissidents have a point and no one seem to be running to catapult a premature election. The population is convinced about the nightmare which is facing, and it is mostly demonstrating with the unique purpose of moderate the executive in some measures. The referred moderate political parties pretend to add growth to the table, and the constitutional court promoted boundaries on the easy way to get money in the budget.
Portugal assists to a strange way to make public debate around the path it has to run, but up to now an effective way. The route is not defined at a table but through a complicated balance of political, legal and public pressure, which up to now point in the right direction.
It is a strange equilibrium of forces, as in a courthouse which if well considered may provide the right track to the economy.
The moment to reshape and the balance in the attrition.
The government, convinced of the ulterior need of stability, concedes anything which is severely demanded and tries to manage through the storms, convinced that no one could change the path significantly - something that seems to be assumed by the median voter. Until the day this changes its persistance in power is secured.
Altogether, Portugal needs a reshape in a program that is falling apart and has little adherence with the present needs of the portuguese and european economy. It is in wreckles, impaired in financial limitations and political will. As the reshape doesn't come from the table, it comes from an unusual law of attrition which however will not destroy the fundamental political stability if the government knows when and how to ease in some moments.
The program is dead an the government is unofficially free to decide what to do, bounded on some economic performance. This provides extra flexibility to the executive but deprives it from the inevitability of an international impostion.
Despite all, one thing is clear: Portugal is doing a risky business, which engulfed Greece into madness. Let as just continue to assist to a law of attrition where every side have the same ulterior political stability to defend and then are aligned in the priorities. If that, even for a once fails, it is clear that Portugal will become Greece instead of Ireland, but if it persists Portugal tend to have better thought policies and a larger probability of a robust and quick recovery.
HFEV
