Concerning Portugal, I note here that the deficit for 2011 is expected to be around 4% of GDP. This low figure was possible due to a technical transfer of pension funds from private banks to the State. This transfer was in the order of 3 G€ in 2011, meaning that without it the 5.9% target *might* have been reached all the same. Another 3 G€ will be transferred up to the midst of this year.

The deficit target for this year is 4.5%, which the budget should reach for a GDP contraction of 3%. When the 2012 budget was presented I thought this would never be possible, but today it looks plausible. The trade deficit is closing rapidly in spite of anything serious being made to reduce imports. It all depends on how deep the recession will be in Portugal's main commercial partners inside the Eurozone.

But Portugal is a small state, with the lowest minimum wage in the Eurozone and where a sizable part of the work force must recur to illegal labour services to have a salary. The same recipe will have different results in other states, especially larger ones like Spain or Italy.

Finally I'd note that in Portugal only large political parties have the means to source the sort of civil opposition to government that we have seen in Greece. The largest demonstrations ever seen in Portugal took place in March of 2011, ahead of the aid request to the Troika. At the time the main concern was to topple the socialist government.

luis_de_sousa@mastodon.social