21 outubro 2002

ECO-TERRORES
Portugal no Financial Times de hoje
Deadlines are looming for forces of resistance: Since Portugal joined the EU in 1986, successive governments, the mainstream political parties and economists have all agreed that the answer to bridging the gap with the rest of Europe lies in what have become known as structural reforms - shorthand for the deep-seated changes required to:
* Modernise the justice, education and health systems;
* Improve the efficiency of the public administrative sector;
* Make the economy more competitive by reducing state intervention and ownership.
Despite this consensus, progress has fallen far below expectations.
For 16 years, vested interest groups have been repeatedly blamed for blocking reforms in defence of their own privileges.
Governments have been regularly berated for not standing up to them.
Spending cuts tighten to avoid EU sanctions on deficit:
"Recent growth in Portugal has been based on domestic consumption and investment resulting in a level of indebtedness that is impossible to maintain," says Ms Ferreira Leite.
"When internal demand contracts, Portuguese companies have always refocused on export markets. As members of the euro, we can no longer devalue our currency to encourage this trend. But export growth of about 6 per cent next year would be a perfectly natural consequence of contracting domestic demand." [...]
The most worrying trend for Portugal is that GDP growth is expected to fall below the forecast EU average of 1.5 per cent this year, interrupting a cycle in which the country has been steadily catching up with the rest of Europe in terms of GDP per capita.
The gap between GDP growth in Portugal and the EU average has been steadily falling since 1998, when Portuguese economic growth of 4.5 per cent was almost two percentage points above the EU average.
Paying a high price for a bloated civil service: Martins da Cruz, Portugal's foreign minister, has advice for the 10 countries preparing to join the European Union. Based on Portugal's experience, he warns them: Don't forget to modernise the public administration.
"This is an important lesson that I hope the candidate countries will learn from us," he says. "We were not successful in reforming our civil service and we are going to pay a high price to do now what we should have done long ago."
Portugal has an army of more than 700,000 state employees, one of the biggest public administrations in Europe in relative terms. The cost of keeping this bureaucratic machine rolling is a strain on the budget deficit and places a heavy burden on taxpayers.
The public sector wage bill amounts to 15 per cent of GDP, the highest level in the EU, where the average is 10 per cent. [...]
In addition, says Manuel Carvalho da Silva, general secretary of the CGTP-Intersindical trade union federation, there is often a stark contradiction between political commitments to streamline the civil service and the actual behaviour of governments.
"The reality is that politicians who talk about cutting back tend to hire thousands more public employees when they come to power," he says.
Politicians clearly have no wish to antagonise public employees, who account for 10 per cent of the electorate, and governments are regularly charged with swelling the ranks of the civil service to win votes.
Shake-up under way to raise output: "Low productivity is not part of the genetic code of Portuguese workers," says António Bagão Félix, labour and social security minister.
"They have proved as emigrants and in well-managed companies in Portugal that they are as hardworking and productive as the best in Europe."
Employers, government, trade unions and foreign investors all agree. "Portuguese workers are willing, hard-working, motivated and unassuming," says Ulrich Ehmes, managing director of the Portuguese operations of Leica, the German camera maker. "You will hear the same story from anyone you speak to."
Given the recognised qualities of workers, efforts to improve Portuguese productivity, by far the lowest in the European Union at about 60 per cent of the average, have to focus on why their hard work is not producing as much wealth as it could.
Manuel Carvalho da Silva, general secretary of the communist-leaning CGTP-Intersindical trade union federation, is sceptical that the official figures for productivity - a measure of output value for hours worked - accurately reflect reality.
"Portugal has a big clandestine economy, estimated at the equivalent of 24 per cent of GDP, which is not reflected in these figures," he says.