Europe - Issue 46 - Magazine | Monocle

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View from Lisbon

Drastic crisis measures are being taken in Portugal and so far, the public is tolerant
By Joana Stichini Vilela

A few months after being forced to agree on a €78bn bailout from the EU and the IMF – and influenced by the chaos in Athens – Portugal is struggling with uncertainty and a bout of low self-esteem. Every evening television viewers can switch between half a dozen debates, each asking: “What went wrong? What can we do? What will happen if Greece collapses?” The country is addicted to self-analysis but, so far, there are few answers.

In June, the centre-right Social Democratic Party (PSD) won the general election, defeating the incumbent Socialist Party. Victory wasn’t conclusive enough, though. To gain a majority in the parliament, the Psd’s leader, Pedro Passos Coelho, had to establish an alliance with the more conservative Christian Democratic Party (cds), led by Paulo Portas. The new cabinet is one of the smallest in Portuguese history: 11 ministers. This is also the youngest cabinet ever, with three of its members under 40. And it’s one of the most politically inexperienced.

For the most important portfolios, 47-year-old Passos Coelho has opted for political independents, people highly regarded for their professional accomplishments. He knows there is no margin for error.

“The main objective is returning to a sustainable path in public finances,” the prime minister said in his inaugural speech. And the government has said that not only will it meet the tough requirements included in the bailout agreement but that it will go even further in an ambitious programme to liberalise Portugal’s economy and society. The view in Lisbon is that only such a decisive move will convince the markets that the country means business. Apart from welfare cuts and higher taxes, the government will introduce reforms in the justice, labour, education and health systems. The general tone is one of less state participation – the only way, the prime minister says, to make the economy grow and create employment. No protests were seen after these announcements. For now, a scared electorate is giving the new government the benefit of the doubt.

Also announced was the privatisation of state-owned companies. A golden opportunity for foreign investors, perhaps, but it is regarded with apprehension by impotent cash-strapped national companies.

The coalition is introducing a new style of governing, more in tune with the dark times that the national economy faces. For the first time in the history of Portuguese democracy, a prime minister flew economy class on his way to a meeting with EU leaders. On the same flight, flying first class, was the mayor of the small southern city, Faro. Some saw it as a humiliation for Passos Coelho. For others it was the perfect chance to start setting an example and doing what he can’t order by any number of decrees – change the Portuguese mind-set.

Key Portuguese politicians and their challenges:

  1. Pedro Passos Coelho:
    The prime minister has to abide by the most austere and ambitious financial plan Portugal has ever faced. At the same time, after what many consider to have been 10 lost years, he has to give some hope to the younger generations.

  2. Vítor Gaspar:
    The finance minister will have to make sure Portugal manages to fulfil the bailout agreement within its tight deadlines – and escape the Greek tragedy.

  3. Álvaro Santos Pereira:
    The economy minister is in charge of relaunching the sluggish Portuguese economy. Reducing the 12 per cent unemployment rate will be his biggest challenge.

Conference call


This year’s autumn party conference season will be more interesting than most – the ripples of the recent phone-hacking scandal can still be felt:


Prime Minister David Cameron will be looking to reassert his authority over his country and his party. He must also prepare the public for the impact of recent budget cuts.

Liberal Democrats

The most nervous of the three parties – even some of its own members resent the partnership with the Conservatives. Another stage in the party’s struggle.


After an unimpressive start as leader, Ed Miliband has ably seized on the phone hacking scandal – Miliband can plausibly claim that Labour’s grovelling to Murdoch didn’t happen on his watch. He has the public’s attention – he needs to tell them who he is.

Lagging behind


Turkey is one of Europe’s least literate nations, with 87.4 per cent of the population over 15 able to read and write (lower than Tonga). Turkey also has one of the world’s largest gender discrepancies, with 95.3 per cent of men literate and 79.6 per cent of women.

Time’s up

Russia — ALCOHOL

Beer has been legally classified as an alcoholic drink in Russia for the first time ever. Previously regarded as a foodstuff, it means that from 2013 Russians will not be able to buy a beer from a retail outlet between 23.00 and 08.00, and the country’s ubiquitous street beer kiosks will disappear altogether. “People will simply buy their beer earlier,” said Vadim Drobiz, an alcohol analyst.

Coming together


Work has just begun to extend Paris’ T3 tramline through the east to the poor northern districts. It’s part of a project to unify the city’s transport networks and end some of the divisions keeping Paris’s different social strata apart. By 2012, the T3 will reach Porte de la Chapelle and Porte d’Asnières by 2017. “Public transport can be a powerful tool to open up poorer outskirts,” says urban designer Hala Akl.

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