We still do not know what reforms Portugal‘s government has in mind for the state. We do know that we need to prune public spending for good. But the aim to cut €2.5bn in 2014, out of a total of €4bn in cuts between now and 2015, has become politically and socially impossible. Would it have been feasible if it had not been rejected by the Constitutional Court?
The country that shied away from higher taxes also shied away from cuts in public spending when it grasped that this would amount to lower salaries and pensions. This is the right way to go, though, and it always has been. But it is just the journey, not the destination. Heading down this road will probably mean closing hospitals, cutting subsidies, firing teachers, and shutting down public companies. Part of this road should already have been travelled a long time ago. Two years after the request for outside intervention, families and companies have adapted – but not the state.
There will be demands to bring greater flexibility to the deficit and to renegotiate the public debt. The austerity that has been announced will increase poverty through social cuts and unemployment by boosting the numbers of public officials who lose their jobs. And so, once more, the new austerity does not replace the previous austerity; it piles it on. Cutting state spending solves only a part of the problem – namely, the building of a better state – a political system free of corruption and with stronger institutions, ensuring a society with goals that can be believed in.
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