The idea of a rescue from Spain distresses the intervened Portugal
The worsening of the Spanish recession worries the Portuguese more than Greece
Sandwiched between the crises of Spain and Greece, the geographical neighbor and the partner in the euro’s caboose, Portugal exhibits the scars of more than a year under the mandate of the troika, the IMF, the EU and the European Central Bank. In this period, which coincided with the first twelve months in the power of the conservative Passos Coelho, unemployment skyrocketed, poverty re-emerged, the middle class declined and emigration was once again a solution.
So much suffering to fulfill the commitments does not even allow to see light at the end of the tunnel. And now the possible rescue of Spain anguishes the Portuguese, because it reminds them of their immediate past, while they feel that it would be a new complication.
“How will it not affect us that Spain falls, if there are even foreigners who think that Portugal is part of Spain?”, Said Bruno and Miguel, two young people of 24 years sitting at the door of the São Bento station of Oporto, whose lobby impresses with its tile frescos. One works in a warehouse and another in a store. They claim to have been lucky against the scourge of unemployment, which affects more than a third of young people entering the labor market.
Since the international intervention, unemployment has skyrocketed in a Portugal in which historically it never reached the double digits. From the unemployment rate of 12.4% in the first quarter of 2011 to 14.9% twelve months later. The April partial figure reached 15.2%, which has led the Government to revise its forecasts upwards. The troika itself has acknowledged its fear of escalation.
Another of the wonders of Oporto is the Lello bookshop, with its two wooden floors and its large spiral staircase. Its owner, Antero Braga, points out that Spain is the main trading partner, the destination of a quarter of exports, so that a worsening of the Spanish recession would be felt. “I hope Spain will hold on, because it’s big,” says the bookseller, who claims that Portugal returns to itself and reactivates its fisheries, its agriculture and its industry.
The Lello bookstore is next to the Clérigos tower, in a zone of traditional commerce that has been run down, overflowing with pessimism. After the counter of a jeweler Marlene and Marilia confess to having saudade (morriña) of the shield. “Salaries gave for much more,” they say. Manuel Rodrigues, owner of a bar, complains about the fall of the clientele and the rise in the VAT of the hotel trade, which this year stood at 23%, which paradoxically caused a sharp drop in revenue.
The global decadence of traditional commerce was worsened in Portugal at the end of the last century by the great proliferation of shopping centers, the exponent of the consumption on credit that contributed to indebt families. The symbol was the Colombo de Lisboa, a huge mass of more than 400 stores, located next to the Benfica stadium. In the temple of the Portuguese consumption some closed store is seen, but few. And there are announcements of some openings. The influx of people has been reduced and consumption has decreased. The Banco de Portugal has detected a historical contraction in domestic demand.
In the armchairs of one of the squares of Colombo, Silvia and Rui, two young nurses, relate the difficulties that many of their compatriots are going through. In any case, they argue that with or without intervention, Portugal needed to change, because it was living beyond the possibilities of its economy.
“The situation is terrible, but this has been going on for many years,” says Isabel, a housewife, who points out several shops closed.
“Especially suffer the stores that have a clientele of middle and low class, as unemployment and the reduction of wages are noticed. The upper class still has money and now has more business options, for example the price of housing has fallen, “explains César Marco who has a perfumery. Considers that a possible rescue of Spain would be even worse for Portugal, since it is the only country with which it has borders.
Economists say that the Portuguese business fabric itself, atomized into thousands of small companies, increases its exposure to the contagion of the Spanish recession, since these firms lack the size to export to other continents.
“Once we have fallen, it was good that at least the Spaniards endured and that the two countries were not in the hands of the troika,” says Maria da Luz, owner of a small jewelry store. Like many Portuguese, as these days continue the news about the Spanish debt has perceived many parallels with the process that Portugal lived a year ago. But in that vision lusa always incorporates a size allusion, because the Portuguese have a distorted perception of the real dimension of Spain.
On the streets of Portugal the role of the troika is omnipresent. On Saturday the newspaper Público joked that Paulo Bento, the football coach, can make substitutions without asking permission from the troika. “For me it is no longer a matter of sovereignty, but of dignity, of being able to decide what we do without being imposed,” says João Martins, a salesman who sees all of Europe in danger.
The troika is especially present these days, because a mission of the IMF, the EU and the ECB has moved to Lisbon to conduct the quarterly review of public accounts, which depends on the payment of a new loan term of 78,000 million euros . Everything indicates that Portugal will pass the test, despite its difficulties in reaching the deficit target, despite the efforts of the Government of Passos Coelho, a coalition of the conservative PSD and the right-wing CDS. On Tuesday marks one year of his victory. The polls indicate a deterioration of PSD of Passos and a recovery of the Socialists, although at the moment the current majority would not be in danger, although it faces a delicate scandal of espionage that can take its toll.
Although a Greek exit from the euro would put Portugal back on the spur, for the Portuguese the Greek crisis now seems very far away. Instead, they feel Spain closer than ever.