So the rich countries in the Europe are once again riding to the rescue of a country that has behaved very badly. Portugal’s problems are structural, their economy is uncompetitive and they have spent vastly more than they have earned in a typical splurge of socialist profligacy and ineptitude.
This bail out is for €78 billion. This is a loan that has to be repaid and which interest has to be paid on, it is not a gift. So how are the Portuguese going to manage this when their economy is deeply flawed? David Cameron and George Osborne have shown that the only way out of a deep hole dug by inept socialists is decisive reform to bring income and spending into balance.
So what are the Portuguese proposals to fix their structural problems?
– NO cuts in most salaries (only from 3,5 to 10% in salaries over 1500€)
– NO cuts in the number of salaries per year for workers or pensioners (14 salaries a year to be maintained)
– NO cuts in civil servants numbers
– NO cuts in most pensions (only a cut of 5% on pensions over 1500€)
– NO privatization of CGD (biggest State bank)
– NO cuts on minimum wage
– NO increase in retirement age (people can take early retirement from the age of 55 so long as they have worked for 30 complete years)
– NHS guaranteed and relatively untouched
As you can see they really aren’t taking their situation seriously, they seem to think they can spend like crazy for ever and that the EU will continue to pay. And they could be right, just look at Greece which has lived on an EU gravy train for years and which is almost certainly totally unable to ever pay their debts off. Yet we continue to pay for their profligacy.
You would think that the politicians of the countries paying out all this money would look after the interests of their taxpayers and not throw good money after bad, but seemingly not, nobody has made a stand and said that we can’t throw hundreds of billions away to dissolute states. Until now. In the recent Finnish election the populist and nationalist True Finns party (Perussuomalaiset) received 19.1% of the votes, which under proportional representation gives them enormous power. So incoming Prime Minister Jyrki Katainen has had no option but to say: “If the majority in Finnish Parliament is of the opinion that it’s in Finland’s interest to overturn all European decisions then that’s what I shall go and tell them in Brussels”. Common sense at last.
Picture from Wikipedia, The Tower of Belém, Lisbon, Portugal. Author=Alvesgaspar