Tuesday, November 23, 2010

PORTUGAL TODAY

Shutdown expected in nationwide protest

The two biggest unions promoting tomorrow's general strike predict it will be massive.

The protest by public and private sector workers has been sparked by an unemployment rate of about 11%, increased taxation, cuts in social benefits and increased job insecurity.

Hundreds of flights have been cancelled. Public transport, schools, hospitals, government officees and local authority services are all expected to be affected.

The police are not allowed to strike but are said to be sympathetic to the walkout.

“Crazies” moving in on the debt crisis

It's much stuffier, but the Great Debt Crisis is a bit like Strictly Come Dancing, with all eyes on who's most likely to go down next.

“This country does not need any help,” declared Prime Minister José Sócrates yesterday. He was referring of course to speculation about a financial bailout in the wake of Ireland's acceptance of emergency funding from the EU and the IMF.

“What the country needs is to do what is necessary, to approve the budget, and to continue in its efforts." In other words, keep dancing.

Sócrates hoped Ireland's U-turn in asking for international help would end the uncertainty and contagion in financial markets.

"I think what was happening recently, was that Portugal was being hit by the lack of confidence over Ireland," Sócrates said. "I hope that the Irish government's decision will end this uncertainty and restore confidence to markets. There is no reason to have a lack of confidence over Portugal."

The Daily Telegraph quoted Claude Juncker, Luxembourg’s prime minister and chairman of the eurozone finance ministers’ group, as saying that “crazy” financial markets could now turn on Portugal and Spain.

Writing in the same paper, Ambrose Evans-Prichard noted that according to the OECD, Portugal will have a current account deficit of 10.3pc of GDP this year, 8.8pc in 2011, and 8.0pc in 2012. “That is to say, Portugal will be unable to pay its way in the world by a huge margin even after draconian austerity. This is the worst profile in Europe.”

Reuters news agency reported yesterday that Portugal had only a few months to pursuade markets it can avoid becoming the next domino to fall by folowing Ireland in seeking a bailout. "Its growth and fiscal outlook suggests it faces an uphill battle," said Reuters.

Le Monde thinks it is inevitable that Portugal will have to ask for outside help as has happened with Greece and Ireland.



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