Portuguese Wary Of German Drive For Austerity

Many Portuguese are angered by the German-led drive for austerity. Backlash is mounting in Portugal where some people fear compliance with rigorous EU policies could weaken their democracy.

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MELISSA BLOCK, HOST:

This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block.

AUDIE CORNISH, HOST:

And I'm Audie Cornish. To Europe now, where the price of a financial bailout is austerity. Greece's latest bailout has created distrust among other heavily indebted EU countries, much of that aimed at Germany, which has led the drive for austerity measures. That's the case in Portugal.

As NPR's Sylvia Poggioli reports, people there are afraid that complying with rigorous financial policies could weaken their tiny democracy.

SYLVIA POGGIOLI, BYLINE: In the eurozone club of bailout recipients, Portugal is the good student that does everything its creditors demand. That contrasts with the northern European image of Greece as untrustworthy and misbehaving. But many Portuguese are angered by what they see as moralism toward a fellow southern European country.

PEDRO SANTOS GUERREIRO: This (unintelligible) and punishing view of a (unintelligible) towards Greece, it really is shameful.

POGGIOLI: Pedro Santos Guerreiro is editor of the financial daily Negocios.

GUERREIRO: Greece is not a company which has profits or losses. You cannot just punish a people. You cannot impose austerity just because they deserve to be punished. That's no way to build Europe. That's a way to destroy Europe.

POGGIOLI: Portugal is the second weakest link in the eurozone chain. More and more economists say the German prescription has plunged it into a downward economic spiral. Consumption has plummeted. Citizens have been hit by sharp tax hikes and longer work hours, and wages and pensions have been slashed up to 30 percent. People are losing patience.

Earlier this month, a protest rally in Lisbon had the largest turnout in 30 years. But Racquel Freire, an activist in the local Occupy movement, says there's a growing gap between newly impoverished citizens and the governing elite.

RACQUEL FREIRE: It's very frustrating. You go to the street to protest and then the power didn't listen to you, (unintelligible) they just don't care. It's a very tragic feeling if you live in a democracy – we're supposedly in a democracy - because the social contract has been broken.

POGGIOLI: Portugal, like Greece and its neighbor Spain, emerged from dictatorships less than 40 years ago. Portuguese closely identified democracy with social benefits, such as health care and pensions, says sociologist Antonio Costa Pinto. The economic crisis, he adds, offers the center right government an opportunity to introduce neo-liberal reforms and replace the cherished welfare state.

ANTONIO COSTA PINTO: That is now, of course, under threat and the government is breaking the agreement with generations. In the next two years, state society relations in Portugal are going to be reorganized. We don't know yet what the final result is going to be.

POGGIOLI: Even if Portugal applies all the austerity measures its creditors demand, there's little likelihood its economy will soon revive. Costa Pinto worries about the possible consequences.

PINTO: The problem is Portugal might be in a terrible situation and the European Union will be probably responsible for more social, political and economic unrest.

POGGIOLI: Most of all, he sees the danger that, by following dictats(ph) from their northern EU partners, the debt-burdened southern countries could undergo negative political transformations and become poor quality democracies.

PINTO: Democracies that lack participation, democracies with more corruption, democracies with more parallel economy.

POGGIOLI: Sylvia Poggioli, NPR News.

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