New Portugal Government To Deal With Economy

Jun 3, 2011
Originally published on June 6, 2011 3:51 pm
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RENEE MONTAGNE, Host:

Good morning.

SYLVIA POGGIOLI: Good morning.

MONTAGNE: Now, if the bailout has already been arranged, Sylvia, it sounds like the country will have to tighten their belts whoever wins. So what is this campaign all about?

POGGIOLI: But the real race is between the center-left Socialist Party that was in office until last March, and the center-right party, which, to make things confusing for all of us, calls itself the Social Democrat Party. Both major parties have carefully avoided discussing the terms of the $112 billion bailout during the campaign and it's pretty clear why. The requirements are going to be very tough; sharp cutbacks in public spending, higher property and consumer taxes and reforms of the justice and labor systems, including much less generous unemployment compensation. And it's an echo of what we've already heard in Greece, Spain and Ireland, all eurozone countries that are in very deep debt.

MONTAGNE: Well, you were in Spain last week where city squares were occupied for days by young demonstrators protesting the dire state of that economy. Are similar protests going on there in Portugal?

POGGIOLI: So in all these three countries, there's this paradox that the best educated generation ever is going to pay the biggest price and is probably destined to live less well than their parents or be forced to leave the country for better opportunities elsewhere.

MONTAGNE: And in Portugal where you are now, that country has already undergone three austerity plans in the last two years. Just two things; can, I mean is there any possibility that they can avoid another one? And what impact have these previous plans had already?

POGGIOLI: Some analysts say how will it be possible to cut deficits and at the same time have an economic recovery to pay back the debt and undergo such tough austerity measures while the country is mired in recession?

MONTAGNE: All right. Thanks very much, Sylvia.

POGGIOLI: Thank you.

MONTAGNE: We've been speaking with NPR's Sylvia Poggioli, who's in Lisbon to cover elections there on Sunday.

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