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PORTUGAL 2014: THE CONSEQUENCES OF A BAILOUT
21
In 2011, recipients of unemployment bene-
fits were 53.6% of the total number of regis-
tered unemployed. Three years later, this num-
ber had fallen to 52.7%. At the same time, the
duration of unemployment benefits and their
value decreased. The result was a reduction in
the spending on unemployment throughout the
period, precisely when unemployment grew
most.
Other social benefits (except for pensions,
which increased their overall value despite cuts)
suffered a cut of 6.3% between 2011 and
2014
5
. At the same time, social policies were
subject to a deep-seated reorganisation, which
translated into promoting and financing the ac-
tivities of institutions that offer social support in
the form of handouts.
In addition to unemployment, the devalua-
tion of work and the downturn in social sup-
port, the rescue significantly increased the tax
burden on income from employment, while of-
fering tax relief on company revenues.
The corollary of this process obviously had to
be a deepening of social inequalities in Portugal.
The statistics released by the National Institute
of Statistics (INE) only hint at this situation when
they show that the Gini Index, for income distri-
bution, rose from 34.2% in 2010 to 34.5% in
2013. In fact, the worsening inequality is ex-
pressed in terms that the direct distribution of
income does not properly characterise: children
and adolescents that have to abandon the edu-
cation system even earlier, people who cease to
have access to healthcare because of the cost or
become subject to long queues, or families that
can no longer afford to pay their rent or mort-
gage interest and find their right to a home
compromised.
5
Social Security Institute, Statistics.
None of this was measured, or even taken
into account, by the Troika. Least of all did they
consider the worst result of the rescue: the de-
struction of hope in an entire generation of
young people. If it were possible to measure
despair, the emigration figures would be the
most eloquent: more than one hundred thou-
sand emigrants per year between 2001 and
2013 – figures only comparable to Portugal in
the 1960’s.
Conclusion
The Portuguese rescue was much more than an
“adjustment programme” imposed on an in-
debted economy in exchange for funding. In
reality, the right wing government and the in-
ternal and external economic elites took advan-
tage of it, making it into an instrument for reor-
ganising the Portuguese political economy.
Under the pretext of fiscal consolidation, the
public provision of health, education and pen-
sions shrunk and new opportunities for expand-
ing private provision were created, especially by
subcontracting the services out. Under the pre-
text of a need to alter the unsustainable growth
of public debt, the privatisation of the public
enterprise sector was practically finished. Under
the pretext of a need to contain the growth of
expenditure on social benefits, supportive,
emancipatory social policies were replaced by a
social support network offering handouts and
based on not-for-profit charities. Under the pre-
text of fighting unemployment and restoring
competitiveness, labour legislation gutted the
crucial mechanisms that protect workers and
the instruments that allow them to collectively
bargain for their wages and working conditions.
The bailout was the driving force that the right
wing and the internal and external economic