It has been a critical week in the political and financial affairs of Portugal and it is ending on a fairly positive note. Both the new prime minister, Pedro Passos Coelho, and former prime minister José Manuel Barroso, now president of the European Commission, are convinced there is broad support among Portuguese people and politicians for the the EU/IMF bailout, despite all its tough reforms and austerity measures.
During the EU summit meeting in Brussels, Barroso noted that "about 85% of the Portuguese people supported the political parties that agreed with the European Commission, the European Central Bank and the International Monetary Fund and agreed on an ambitious and demanding reform program."
Barroso added: "The 'troika' visited Portugal and made contact with the Portuguese authorities and came back with a very positive report. And I hope that spirit and that cooperation will continue in the tasks to come.”
Said Passos Coelho: “Portugal has all the conditions in place to make this program a success." He announced today in Brussels that his coalition government is preparing to accelerate and possibly broaden the austerity measures Portugal has promised in return for a €78 billion bailout. He said he was also considering a swifter reorganisation of loss-making state companies, adding that he would give details of his plans next week.
The prime minister flew to Brussels economy class instead of business or first class. “It's about setting an example, and I'll stick to that,” he said. When asked if travelling economy class would apply to all Portuguese government officials, Passos Coelho said: "Certainly".
The news from Brussels today is not all heartening, of course. While EU leaders reaffirmed their determination to stabilise the euro currency, the likelihood of a Greek debt default remains. Default could seriously undermine confidence in the single currency.
The EU cannot make a decision on the second bailout for Greece and a more immediate injection of €12 billion to stave off insolvency until the Greek parliament votes on a new package of spending cuts and tax hikes. That comes next week. Today, EU leaders unanimously urged all Greek politicians to back the austerity measures.