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PORTUGAL: Strike Takes Aim at Socialist Government’s “Neoliberal” Policies

Mario de Queiroz

LISBON, May 30 2007 (IPS) - The economic decline of Portugal’s middle class, the growing marginalisation of the poorest of the poor, the uncertainty facing young people and drastic measures – described by critics as “neoliberal” – adopted by the socialist government form the backdrop to Wednesday’s general strike in this southern European country.

The strike was called by the powerful Confederação Geral dos Trabalhadores Portugueses (CGTP) trade union federation, which is close to the Portuguese Communist Party. It also has the support of the main unions comprising the pro-socialist União Geral de Trabalhadores (UGT) labour federation, despite the urging of UGT leader João Proença to refrain from criticising Socialist Prime Minister José Sócrates.

While trade unions reported that public sector participation in the strike was as high as 80 percent, the government said it affected only 13 percent of services.

CGTP spokeswoman Ana Avoila said the initial data indicated that 80 percent of public services have been disrupted, “the highest level seen since Apr. 25,” 1974, when mid-ranking army officers overthrew a 48-year dictatorship in Portugal.

But Finance Minister Fernando Teixeira dos Santos downplayed the impact of the strike, and said it only affected some sectors. “General strikes paralyse countries, but this country is not paralysed,” he said.

Hardest-hit, according to independent observers in the local press, were the subway and river transport systems in Lisbon, as well as hospitals, garbage collection, the courts, schools and city governments around the country.

The last general strike in Portugal took place in December 2002 to protest a labour code that made it easier to fire workers, promoted by then conservative Prime Minister José Manuel Durão Barroso, who is now the president of the European Commission, the European Union’s executive branch.

Economy Professor María Manuela da Cruz Góis told IPS that the strike was “a consequence of monetarist and neoliberal policies imposed by the EU and the International Monetary Fund through structural adjustment measures aimed at cutting the public deficit and stabilising the local currency.”

These policies “have no ideological basis and are not concerned with satisfying the basic needs of the population, and paradoxically it is the Socialist Party (PS) that is imposing measures that not even the right dared to put into effect when it was in the government,” added the economist, who also has a degree in sociology.

Cruz Góis said the effects of such measures “have been dramatic in Portugal, whose economic indicators are lower than the EU average, and they have translated into a weakening of the role of the European social welfare state, public spending, and support for small companies and other social development projects, all of which have led to a rise in poverty, exclusion and social inequality.”

By contrast, Sócrates stressed last week “the strong performance” of the Portuguese economy in 2006, noting that the budget deficit had been reduced to 3.9 percent, below the 4.6 percent target set by the government.

These results, he said, meant the government was adopting “more ambitious” goals, and instead of the 3.7 percent target set for 2007, “the goal will be 3.3 percent this year and below three percent for 2008,” by which time “Portugal will no longer have an excessive budget deficit.”

Members of the euro currency group must keep their deficits below three percent of gross domestic product (GDP), something that Portugal – which has the highest deficit of the 13 euro countries – has failed to do.

But Manuel Alegre, the leader of the “left wing” of the governing PS, who was defeated by Sócrates in the party’s elections for secretary general in 2003, frequently makes statements like “life exists beyond the deficit” and “human beings should not be reduced to numbers.”

In fact, the indicators published last Thursday by the National Statistics Institute (INE) show that the unemployment rate has risen to 8.4 percent – the highest level seen in the last nine years – and is still climbing.

However, that same day, Minister of Labour and Social Solidarity José Antonio Vieira da Silva said that while unemployment remains high, recent figures from the Institute of Employment and Professional Training “show that the labour market is actually recovering.”

Another factor increasing public support for the general strike is the inequality that marks Portuguese society, CGTP leader Manuel Carvalho da Silva said in a television interview Tuesday.

According to studies by the non-governmental organisation Oikos, the 100 biggest fortunes in Portugal represent 17 percent of GDP, with the wealthiest one-fifth of the country’s 10.2 million people holding around 46 percent of the national wealth, while the poorest one-fifth live in poverty.

The enormous wage gap is another common complaint among workers, who hear politicians continually harping on the need to keep wages down and urging them to “tighten their belts”, while the administrators of public enterprises earn huge salaries – as much as 2.5 times what their counterparts in Spain, France or Italy earn.

Portugal had the largest gap between the lowest and highest wages of the 25 countries comprising the EU up to Dec. 31, 2006 (Bulgaria and Romania joined the bloc in January). Among the 25, the highest wages are five times the lowest on average, compared to 7.4 times in Portugal.

In a recent seminar on poverty in Portugal, economist Manuela Silva, vice president of the Catholic Church’s National Commission for Justice and Peace (CNJP), deplored the use of “false truths” with respect to curbing the budget deficit, which “should be an instrument rather than an objective of economic policy,” she argued.

“It is simply unacceptable for a country that has already achieved certain income levels to continue to have such a high degree of poverty, lamented Silva, pointing out that 145,000 low-income elderly people in Portugal receive a “social pension” equivalent to just 75 dollars a month.

In addition, 120,000 retirees draw a monthly pension equivalent to 201 dollars a month, 272,000 retired farm workers draw a pension of 243 dollars a month and 708,000 retired workers in the industrial, commerce and services sectors earn pensions of 264 dollars a month.

The CGTP spent the past month raising awareness on the general strike, which is demanding a change of course in Sócrates’ “neoliberal policies” in order to improve living and working conditions in Portugal.

Cruz Góis ended her interview with IPS saying the general strike was the result of “this sad history, in which there are no innocents, of the successive governments that have ruled Portugal since it joined the European Economic Community (now the EU) in 1986, and which – unlike in Greece or Spain – have not allowed the poor to stop being so poor.”