Mario Soares is man of the (reasonably moderate) Left, but he is also the statesman who steered Portugal to democracy, and away from a powerful Communist threat.
And he has had enough of what the euro is doing to his country. He’s advocating default, something that (although the political calculations surrounding this are very tricky indeed) would probably lead to Portugal’s exit from the euro.
Writing in the Daily Telegraph, Ambrose Evans-Pritchard reports:
Mario Soares [has . . .] said all political forces should unite to “bring down the government” and repudiate the austerity policies of the EU-IMF Troika. “Portugal will never be able to pay its debts, however much it impoverishes itself. If you can’t pay, the only solution is not to pay. When Argentina was in crisis it didn’t pay. Did anything happen? No, nothing happened,” he told Antena 1.
Well, that’s not exactly right. There are various reasons why Argentina was able to get away with what it did (including a resource base that Portugal does not enjoy), and it came with its costs too. Nevertheless the fact that Soares is openly referring to it as a possible precedent is revealing. He continues:
In their eagerness to do the bidding of Senhora Merkel, they have sold everything and ruined this country. In two years this government has destroyed Portugal . . .
That’s unfair. The current crisis has been brewing ever since Portugal’s ill-judged decision to sign up for the single currency, under (ahem) the Socialists. Here’s what The Economist’s Charlemagne had to say about that back in 2010:
The Portuguese did not do their homework to prepare for euro entry…. Overnight, the country found itself enjoying German-style low interest rates, and not enough effort was made to explain to citizens that this was a unique moment in history, to be seized and not squandered. Instead, Portugal embarked on a short-termist spiral of private indebtedness, though it avoided the housing bubbles seen in places like Spain or Ireland.
There is still plenty of support within Portugal for the single currency, but ever less for the price that the country must (apparently) pay to hang on to it.
Raoul Ruparel from Open Europe said Portugal had reached the limits of austerity. “The previous political consensus in parliament has evaporated. As so often in this crisis, the eurozone is coming up against the full force of national democracy.”
And that’s also true in the countries that are paying for this farce. There have been flashes of voter revolt in the Netherlands, and the Finns Party (True Finns) continues to channel the spirit of the Winter War in its implacable opposition to the demands being made on Finland. Most encouraging of all are the signs in Germany — still the sleeping giant of single-currency skepticism — that the country’s looted taxpayers may finally be finding, in Alternative für Deutschland, a party that will stand up for them.
It’s about time.