If someone had lived in Portugal five years ago, had been absent and were to return, they would find it difficult to recognise the country. The social structures have been destroyed for example the former middle class now struggle on 600 euro (roughly £500) a month in the most precarious work situations. 

Public services like education and healthcare have been brutally dilapidated and made less and less accessible to the working class. The most qualified generation has had its hopes of a better future destroyed and some are going abroad.

The background to this tragedy is that in recent decades the productive sectors of the economy (fishing, agriculture and industry) have been destroyed as a result of the EU policy of trashing the productive output of countries in the south of Europe and turning them into service-based, dependent states. A significant section of the country’s bourgeoise, involved in banking, construction, tourism, distribution and plundering the former colonies (mainly running businesses in Brazil and Angola), went along with all of this.

Troika’s attack

In this fragile situation there was a massive bank bail-out in 2009-10 with a simultaneous fall in revenue as a result of the failing economy. According to the Eurozone rules, states must fund themselves by borrowing from private banks. These banks borrow at low interest rates from the European Central Bank (ECB), which means that banks can make fantastic deals on sovereign debt by charging higher interest rates on loans that are arranged with states. Eventually it becomes unsustainable. Hence, after Greece and Ireland, it was Portugal’s turn to have a Troika (the EU, European Central Bank, and IMF team) intervention in order to guarantee that creditors would see earnings from their parasitical activity. The same old package of massive spending cuts, tax hikes and liberal labour laws were applied in return for a so-called “national rescue” plan. In fact the Deutsche Bank, Societe General, Barclays and other creditors, who have been profiting from the debt, are the ones being rescued by preventing an otherwise inevitable default.

Blood sucking

The result of the Troika intervention is an attack on workers’ living conditions, especially the youth. Public sector workers have suffered, with their salaries and pensions falling between 3.5% to 10% at the start of 2011. Extra pay months (Christmas and June allowances) have been abolished and careers have been frozen. The classic IMF attack on workers’ contracts and rights was repeated here. Compensation for firing, lay-offs and bonus pay for overtime has been slashed and bank holiday pay has gone. The general VAT was increased from 21 to 23% and is now charged on restaurants and most food products. Transport and utility costs have also been effected by a global rise as dictated by the infamous Troika.

Portugal is facing the same tragic scenario as Argentina did at the beginning of the last decade, when they struggled with blood-sucking spiraling foreign debt while under the fist of the IMF. As in Argentina, now in Portugal not to mention Greece, a huge chunk of the middle class is being erased from the social map. Poverty-related issues that were unheard of in previous decades have emerged such as food-distribution charities who are close to collapse due to an unprecendented demand. There is a whole generation of youth on the scrap heap of unemployment and precarious living, or alternatively they are migrating abroad.

However, as in Argentina, the working class response has been climbing steadily, with many angry protesters regularly filling the streets, reaching levels unheard of since the revolution of 74-75. March 12, 2011, in the wake of the Arab Spring, the Geração à Rasca – the “troubled generation” – a facebook called protest, mobilised 300,000 people from a nation of 10 million on to the streets of the main cities. In just one year two widely participated general strikes have taken place which ground the country to a halt.

The EU is a powerful tool of the continent’s bourgeoisie – mainly the ruling classes of the central countries Germany and France. It is determined to force southern European countries and Ireland into making endless efforts to pay the debt and its enormous interest rates, a very profitable lifeline that maintains profit for bankers and speculators. The EU will be relentless in trying to keep the single currency, and hence the dependence of the southern countries and Ireland (referred to as PIIGS – Portugal, Italy, Ireland, Greece and Spain).

It is a historical and very challenging task of the mass movement that increases daily, to fight for a better future. There is no realistic solution to be found in the rotten mechanisms of capitalism or in its present administrations. No realistic solution can consider paying the foreign debt and continue in the framework of the Euro. The time has come to kick out the Troika, stop paying the foreign debt and open all the financial books of the EU. The time has come to leave the EU and join forces with the other struggling workers of Europe against the common oppressive enemy, fighting for a socialist future!

André Traça is a member of the International Socialist League