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Portuguese react with fear, relief to bailout

Published on 07/04/2011

After months of rumours and denials, Portugal reacted Thursday with a mixture of fear, relief and resignation, to the government's announcement that it would seek a bailout.

“We have reached such a point that I doubt it could be worse for us to ask for aid,” said Jose Carlos Rodriguez, who wore a suit and sunglasses as he stood outside the headquarters of the insurance firm where he works.

Prime Minister Jose Socrates announced late Wednesday in a televised address to the nation that his government had finally decided to seek EU help to resolve its debt woes, paving the way for a third bailout of a eurozone country after Ireland and Greece last year.

He resigned two weeks ago after opposition parties rejected his minority government’s latest package of austerity measures — the fourth in the past year — aimed at averting the need for a bailout but is staying on as a caretaker until early general elections on June 5.

“On our own we will get nowhere! Governments will come and go and it is always the same thing. The country does not advance,” said hospital worker Joao Moreira as he stood outside a Lisbon metro entrance that was closed because of the latest strike by metro workers over cuts to their salaries.

“I’m going to be late for work again. The grumbling is just going to get louder in the coming months with the measures that are coming,” he added.

The government has already imposed an average five percent cut in public workers’ salaries since January and called on state companies to cut expenses by 15 percent over the past year as part of austerity measures.

Eurozone officials have said Portugal is likely to need around 75 billion euros ($107 billion) in European and International Monetary Fund loans over three years, and any assistance will be subject to strict conditions.

“I don’t understand anything about politics but I am worried. I fear that the arrival of the IMF will mean salaries will be lowered,” said a gardener who works for Lisbon city hall who declined to give his name.

It will be the third time that the IMF has intervened in Portugal since the 1974 “Carnation Revolution” put an end to right-wing dictatorship of Antonio Salazar that had ruled the country for over four decades.

Both the IMF interventions in 1978-79 and 1983-85 involved steep spending cuts and currency devaluations which led to a sharp fall in purchasing power.

“All this frightens me!,” a retired man said as he browsed the headlines of newspapers at an outdoor kiosk.

“I was born in 1921. I have known poverty…. Today politicians are selfish, dishonest, greedy and incompetent. That is all I can say.”

A poll published Thursday showed the public is evenly split over whether the government should seek outside assistance to resolve its escalating debt problems.

A total of 39 percent of those questioned said intervention by the EU and the IMF was “the best solution for the country,” according to the poll published in several newspapers.

The same percentage believed it was “preferable” that the country did not resort to a bailout.

The other 22 percent did not want to reply.

The poll was carried out by the Catholic University among 1,288 people on April 2-3, at a time when Prime Minister Jose Socrates was still ruling out any such request.