[size=55:3c305csu]Sofia echo 12 Dec 2010

A Portuguese lesson for Bulgaria?

Portuguese prime minister José Sócrates has apparently assured the world that his country does not need a bailout. Alarm bells must be ringing everywhere.

The recent history of Portuguese politics is not particularly reassuring. Perhaps, however, Bulgaria could heed some important lessons from Portugal's shortcomings.

Where shall we start? Well, I trust by now you've all heard of José Manuel Barroso, the current head of the European Commission? Barroso became prime minister in 2002, having inherited a dreadful mess from his predecessor, António Guterres, who became the UN high commissioner for refugees. (I've often wondered if Portuguese prime ministers are rewarded for failure).

Perhaps Barroso's most significant "
achievement"
was "
doing the catering"
(his own words) on the Azores for the pre-Iraq war summit, attended by former US president George Bush and former British prime minister Tony Blair in early 2003.

Back in Portugal, Barroso was deeply unpopular. He suddenly resigned in 2004 to take up his new position in Brussels. He was replaced by Pedro Santana Lopes, former mayor of Lisbon. No election took place. Lopes' short spell in charge was marked by administrative blunders and personal gaffes. The election of 2005 came before the official end of his term and was called at the behest of the then president Jorges Sampaio. (In Portugal the president has the prerogative of dissolving parliament and calling elections – a power known as "
the bomb"
.)

The 2005 election was a policy-free zone. Lopes tried to steer TV debates towards the issues. Sócrates merely stated repeatedly that Portugal needed "
a good government"
but gave no details.

Far-left parties were omnipresent during the campaign. The head of the Portuguese communist party, Jerónimo de Sousa, debated on live TV with Sócrates and Lopes. In what other European country, I wondered, would the communist leader be given equal air time as the mainstream candidates? The head of the Bloco de Esquerda, (the left bloc) Francisco Louçã, also appeared on every news bulletin. Louçã was a sensitive-looking intellectual who would have been at home on a student campus circa 1968.

Watching this strangely outdated contest made me feel that Portugal was out of step with the rest of Europe. Sócrates, of course, won by a landslide, confirming the truth of the old saying that "
oppositions don't win elections, governments lose them"
. Santana Lopes, after all, had become a risible figure.

Sócrates promised change but little came. In Portugal it's difficult for the socialists to implement change of any kind, beholden as they are to special interests. Charges of "
betrayal"
resound from every corner, particularly, of course, the communists. When Álvaro Cunhal, a former secretary general of the communist party, died shortly after the 2005 election, the country fell into national mourning. This was a die hard communist who worshipped the Kremlin. Yet he was feted like a hero. 'Nough said.

Things should have been a lot better for Portugal. When Lisbon joined the EEC (as it was then called) in 1986, it was a time of great excitement. Portugal received 42 billion Euro in structural funds and 6.3 billion Euro in cohesion funds over the next 20 years. A massive construction boom ensued. Its good side was a transformation in the country's dilapidated motorways. Its bad side was that too many ugly building started to mar the coastal skyline. Yet nobody complained.

Successive Portuguese governments believed that tourism would continue to be the country's most lucrative industry. Unfortunately, countries like Florida, Turkey and Thailand pulled in the punters by offering better service and cheaper prices. Funding of education and training also fell back. In 2007 it was estimated that investment in research and development was only 40 per cent of the EU average. Meanwhile, companies relocated abroad where labour costs were lower.

Sadly, the construction industry has now gone belly up. Portuguese resorts are now littered with half-finished projects, abandoned hotels and villa developments. Meanwhile, problems endemic in Portugal – overmanning and restrictive working practices – have continued unabated.

Sócrates narrowly won re-election in 2009. Now, however, the chickens have come home to roost, as well as every other cliché about the Portuguese economy, namely that it has a bloated public sector, the private sector is uncompetitive and the economy too dependent on tourism. Meanwhile, EU funds have, of course, long since dried up and Socrates' socialists have been forced to pass an austerity budget.

Take heed, Bulgaria?

Portugal is a lovely country, have been there a few times and thoroughly enjoyed it. However, the news today in the financial markets are not good for Portugal and Spain, the Germans are suffering under the financial strain of holding up the Euro on behalf of the rest of Europe and look as thought they are going to abandon Portugal and Spain. Both countries have only got until the end of January to get loans from Europe and the IMF and Germany are not looking to help them. It looks like the end of the Euro is going to come before any anticipated and will put all the Euro countries in a bit of a mess. It is to be hoped that BG take heed of the situation and if possible stay out of the Euro currency, that's if it still exists in 2014!!