A Country in Crisis

Portugal is officially a company in crisis. The opposition says so, the economists say so, the media say so, even the government says so. It even has a name, "o Crise" (the crisis.) The government, of course, blames the Crise on the international scene: high petrol prices, poor financial markets, but the International Monetary Fund (IMF) swiftly retorted that this Crise was all the fault of the government.

To a degree, both are right, the Portuguese government has created an economy, with over taxation and little support, that is increasingly like the Brazilian one. There is a huge wealth gap, people either have money or they don't, the middle class is disappearing. This has been made worse by international pressures such as the high oil price and the credit crunch, which has put pressure on the financial markets. Mind you, they are trying to be progressive, which is a part of the problem. For example, today it was reported that every new school child will receive a small computer. The idea is that Portugal will be a technological leader, in 10 years time, when these kids are

In a country where the average wage is 800€ per month, and the price of petrol at the pumps is similar to that in London, with a minimum wage of 1.300€, people are suffering. Businesses such as cafés, restaurants, and of course bars, in fact all service industries, are suffering because people just can't afford to go out any more. A recent article on SIC news said that 25.000 construction companies have failed since the beginning of the year, and a survey on RTP2 news reported that 75% of people thought things were getting worse over the previous year (0% thought things were better). Only today, the Jornal de Notícias reported that in June and July, over 5.000 people lost their jobs due to factory closures in Braga alone.

One of the unusual customs in Portuguese employment is that although they work for 12 months, Portuguese are paid for 14 months, receiving an additional monthly salary in July and December, called the subsídio. However, in the current climate some companies are even finding it difficult to pay the subsídio for July to their employees. For example, the University of Aveiro caused a furore when they announced that money for research was to be withdrawn from some departments to pay the subsídio, an amount of approximately 10€ million.

The government said that the Crise began about 1 year ago, and will most likely continue for some time to come. Public confidence in the country remains low, businesses continue to struggle. Even traditional businesses are suffering, since the actions of ASAE, the equivalent of Home Office inspectors (but the paramilitary wing, ASAE officers can be armed) have closed many traditional sweet and cheese businesses for poor working practices. Many of these regulations were brought in to bring Portugal in line with the EU, which is a good thing, but rather than being a gradual change and applying common sense, as in many European countries, the Portuguese government has been over enthusiastic in introducing new laws.