Portugal Votes In Symbolic Ouster Of Failed Government, As IMF Is Now In Charge
(This is the latest article in the Congress of Berlin 2.0 series, seeking to expose the ongoing scramble to "recolonize" an insolvent Europe according to the whim of the banking kleptocarcy, whose latest 'humanitarian' intervention is called a "debt-for-sovereignty" exchange . We expect many more in this series.)
Today, in a much anticipated outcome, Portugal will vote to replace the caretaker Prime Minister Jose Socrates with opposition center-right Social Democrat Pedro Passos Coelho. Alas this is largely a symbolic vote as the new guy is just a continuation of the policies of the old guy: "Passos Coelho, who cast his vote at a polling station in Amadora on the outskirts of Lisbon, where reporters by far outnumbered voters, said Portugal had to stick to the bailout terms to regain market confidence and return to growth." Even the young people understand this: "Ricardo, a voter in his late 20s, expressed a common view that any new government just has to march to the beat of the lenders' drum. "I think the election won't bring anything new because it's the IMF in charge of the country now ... Any party that gets to the government will just have to follow IMF rules, " he said." Spot on. And we wonder how long before Mohamed El-Erian, or some other actual thinker, has an op-ed discussing the pitfalls of what we have now trademarked as "The Congress of Berlin 2.0: the scramble for Europe."
The Portuguese went to the polls on Sunday to elect a new government which will lead the nation through a period of deep austerity and recession after it received a 78-billion-euro (114-billion-dollar) bailout from the European Union and IMF.
The election will end a period of political uncertainty that started with the collapse of the Socialist government in March and led Lisbon to become the third country in the euro zone to seek a bailout after Greece and Ireland.
The Portuguese, who face unemployment at its highest level in three decades, are expected to reject caretaker Prime Minister Jose Socrates in the snap ballot and turn to opposition center-right Social Democrat Pedro Passos Coelho.
"In the markets, we will only have confidence if we are committed to the memorandum of understanding reached with the European Union and the International Monetary Fund," he said, adding that he was hoping for a "great result" in the ballot.
So Coehlo is worried about getting capital markets acces back: funny, so did Greece about a year ago. Now it is farther from accessing the bond markets than ever, and it has to contend with a Brussels-controlled privatization agency, which will apportion to spoils to the banking winners appropriately.
The latest opinion polls gave Passos Coelho around 37 percent support compared with 31 percent for Socrates, which will most likely mean that the Social Democrat will need to team up with the smaller rightist CDS party to form a majority in parliament.
"Both parties are strongly committed to the implementation of the bailout conditions and would easily negotiate a common economic program."
Oddly enough, none of these "leaders" understand that recovering from a massive recession, accompanied by fiscal austerity, will never work if still under the confines of a monetary regime. But they sure can try and pretend...
A center-right coalition government should be able to quickly enact reforms and austerity measures included in the bailout, such as sweeping tax hikes and deep spending cuts, to ensure the country reduces its large debts.
But Portugal's economy is expected to contract two percent both this year and next, raising tough challenges for any incoming government as the disposable incomes of the Portuguese decline and austerity takes its toll.
So far there have been few strikes and protests against the austerity, unlike in Greece and in neighboring Spain, but as the country's recession deepens that could change, analysts say.
In the meantime, the Irish Independent came out with an article titled appropriately "We will default, so let's get on with it"
Ireland will default, when it does happen we should not do it alone but
with Greece and Portugal; we should consider leaving Europe given how
badly they treat us; we need to take a scalpel to our public sector and
Ireland will take five to seven years from now to recover.
Alas, the banking syndicate will only allow this after it has succeeded in "privatizing" all the cash flow producing assets in its brand new colonies of Greece, Ireland and Portugal (soon Spain and Italy). We only wonder what role Russia will play in all of this, and more specifically, how Putin will react when he realizes what is really going on.
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