Portuguese believe worst is yet to come

2011-03-24 20:03

Lisbon - Portuguese workers said on Thursday they feared austerity measures would only bite harder after their prime minister resigned, a move that makes a financial bailout for the debt-ridden country more likely.

Sitting at an outdoor cafe terrace in the historic centre of Lisbon, Sebastiao Nogueira said he was "worried, like everyone" in the wake of Prime Minister Jose Socrates' decision to quit late on Wednesday after parliament rejected the government's latest austerity plan.

"What is going to happen in the short-term is disastrous, it means the arrival of the IMF and people are going to suffer more than they have up until now," the 58-year-old optician said.

The austerity plan - the government's fourth in a year - was aimed at avoiding the need for a bailout for Portugal to help it meet debt repayment obligations, a package similar to those granted by the International Monetary Fund and the European Union to Greece and Ireland last year.

Analysts have estimated that an international financial rescue for Portugal would cost between €50 and €100bn.

On the streets of Lisbon opinions were divided between those who were happy to see a prime minister who had imposed tough austerity measures go and fears over what a bailout would mean for the country, one of the poorest in the 17-nation eurozone.

"Socrates was right to resign, all he did was stupid things. But now another will come who will do the same. Politicians and their families, they don't earn €500 a month like we do," said Elvira Cerqueira who works as a cleaner for the Lisbon metro.

Breaking point

Metro workers staged a five-hour strike on Thurdsay to protest pay cuts, forcing thousands of workers to find an alternative way to get to work

The strike follows large protests in the Portuguese capital and other cities against government austerity in the past two weekends.

"We are already at the breaking point that I can't see how there could be more measures," said a woman who only gave her first name as Maria.

The government has already imposed an average five percent cut in public workers' salaries since January and called on state companies to cut expenses by 15% over the past year as part of the austerity programme.

The austerity plan that was rejected by parliament on Wednesday called for fresh budget cuts, a longer freeze on retirement, new taxes and cuts in social programmes.

Some though welcomed the prospect of a bailout.

"For me the best thing would be if the IMF intervened quickly, at least like that it would not just be the people paying for the crisis on their own," said 32-year-old unemployed IT technician Paulo Silva as he had a beer at a bar.

The Portuguese President Anibal Cavaco Silva will hold meetings with all political parties on Friday and the government would retain full powers at least until then.

He can now invite parties with representation in parliament to form a coalition government or, in the more likely scenario, he can dissolve parliament and call snap elections.

Read more on:    imf  |  jose socrates  |  portugal  |  economy
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