Hello everyone! Today I joined the Planet Money team as the new intern. I arrived here in New York on the eve of a big election in my home country, Portugal, where I lived for 16 years.
Two months ago, the Portuguese prime minister resigned following Parliament's rejection of a fourth round of austerity measures. In yesterday's special elections, his Socialist party suffered its worst defeat in twenty years, coming in far behind the centrist Social Democrats. The winning party is expected to join the right-leaning Democratic and Social Center party in a coalition that will control the majority of the legislature's seats.
In a country with five major parties, such a resounding victory is rare. Yet the winners won't have much time to celebrate. As part of the bailout package the country accepted, the new administration must present a proposal by the end of July saying how they plan to improve the country's fiscal situation and meet a series of debt and growth targets. They must also find a buyer for a bank the state recently nationalized. Only then will the second round of bailout money from the EU and the IMF be made available.
Reducing a country's public debt is never an easy sell, but particularly not in a country with universal health care enshrined in its constitution. The incoming prime-minister has already said he believes that the reforms needed to meet the fiscal targets can't happen without changes to the constitution. Having control of the majority of seats in parliament should make it easier for the coalition to push their plans through parliament. Yet it's not certain that the new government will be able to deliver the changes needed to bring Portugal to a manageable debt level.
Filipe Miranda is Planet Money's new intern. He will receive a masters degree in economics from Tufts University this December.