Sunday, February 27, 2011

Beware the Ides of March!

March is shaping up to be a key month politically, economically and socially in Portugal.

If the Portuguese went to the polls tomorrow, the present Socialist government would be humiliated. The latest opinion poll shows that the centre-right Social Democratic Party (PSD) would win an absolute majority of nearly 48 percent. The Socialists (PS) would be left trailing in second place with just 29 percent.

Although a general election is not scheduled until 2013, the recently re-elected President Aníbal Cavaco Silva has the power to dismiss the prime minister and dissolve parliament if he feels the situation is serious enough to warrant such a measure. The President, although in theory above party politics, is a former leader of the PSD and it was the PSD who backed his re-election campaign.

The small left-wing Left Bloc in parliament has proposed a vote of no confidence in the government in March. Of greater importance is that for many weeks now, PSD members have been calling for the resignation of Prime Minister José Sócrates if Portugal is forced to go cap in hand and ask for a bailout. Most analysts now agree that it is not 'if' but 'when'. It is likely to happen in March - or April at the latest.

Despite Portugal's stubborn efforts to avoid it, ever-spiralling debt levels will almost certainly force the government to concede and ask for help from the European stability fund. It is already under pressure from EU countries, especially Germany, to follow Greece and Ireland in seeking a bailout. German Chancellor Angela Merkel has asked Sócrates to go to Berlin for a meeting to discuss the issue on Wednesday, 2nd March. This is believed to be by way of preparation for further discussions on the same subject during EU summit meetings scheduled for 11th March and 24th March.

The economic and political tightrope walking is going on amid growing social unrest about pay-cuts, job losses, dwindling employment prospects, increasing unemployment rates and higher prices.. A huge turn out is expected in the streets of Lisbon on March 12th to vent public anger and make demands, such as cuts in senior civil servant benefits.

There is disquiet throughout the country, not just Lisbon, and not just among the young. In the Algarve, the major economic activity, the region's 'life-blood' -  tourism - is struggling. On top of everything else, Easter, the traditional start of the summer season, is late this year.

Tourism is not going to be helped by the introduction of tolls on the A22 trans-Algarve motorway. The tolls have been denounced by just about everyone in the Algarve - but the government seems determined to impose them anyway – starting on 15th April, exactly a week before Good Friday.

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