When the new Portuguese government, headed by the Goan origin Antonio Costa, came to power on November 26 2015, not many people expected it would last and promote so many changes to daily life of the people.
In the nineties and the years after, Portugal wasted money and public deficit reached high levels. People were used to spend more than they had, borrowing money from banks. On account of this, European Commission imposed in 2011 drastic measures to reduce the deficit. The previous government had to take unpopular measures, but it was accused of being more drastic than European Commission, instead of implementing gradual measures.
Costa was able to negotiate an agreement with the left parties, namely Communist Portuguese Party and Bloco de Esquerda. These parties were not interested in joining Socialist Party in the new of government, but they decided to support a socialist government, provided some major issues were settled; for instance, less austerity measures, the reduction of the working hours of public employees to 34 hours per week, the reduction of taxes for people with low income and other measures. The two left parties are against the European Union and would like Portugal to get out. However, they accepted not to raise any demand concerning this matter.
Costa formed a government with socialist party members and independents. In the following months, PSD and the right wing parties didn’t accept the legitimacy of the new government, saying that according to the tradition in Portugal the party that won the election should rule. However, the Portuguese Constitution only says that the program of the government must be approved by the Parliament. So, if the first party is not able to approve its program, then the second party is invited to form government, which had happened. In these last six months, the government had two main aims: to solve urgent problems and to act like fireman and to fulfill promises made to the people.
The government increased the minimum national salary to €530 monthly and reduced the tax for social security; reduced taxes paid by those who have low income; implemented the benefits for the unemployed and the poor; reestablished four national holidays that were suppressed by the previous government; reduced taxes for meals in restaurants and stays in hotels and prefers dialogue to all social groups, avoiding confrontation.
The left parties are respecting the agreement with Socialist Party, because they are aware that a right wing government will take hard measures to people with low income. In January, a new President was elected, Mr. Marcelo Rebelo de Sousa, who classifies himself as center-right. However, unlike the previous President, Rebelo de Sousa considers the new government must rule for four years, till the mandate of Parliament ends, unless it loses the support of Parliament.
Costa has said that it is necessary to turn the page and now give priority to the economy, so that the country may grow, with more jobs and reduction of the deficit. The big problem is the economy. During many years, government wasted money with the construction of motorways, bridges, football stadiums etc. The deficit is still very high and the European Commission will probably impose new austerity measures, which Costa wants to avoid. If he has to obey to European Commission, there are doubts if left parties will go on supporting the government. Probably, they will prefer to bring people to the streets to protest against government.
This will be a big problem for government, as Socialist Party hasn’t a majority in Parliament. Costa is aware if economy doesn’t improve government cannot go on approving popular measures, which have a cost. So, he looks forward for a new development of economy, with more investments.
China and India are two countries which may invest in Portugal. Chinese are investing in key sectors and Ban of China has already agencies in the country. Costa would like Indians also to invest. Even those who don’t agree with Costa, recognize that he is a very intelligent and clever politician, and also honest. These three qualities may not be enough to overcome the difficulties, but they surely help.
