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'Calculated Arrogance' Over Austerity Plan Dooms Socrates

Portuguese Prime Minister Jose Socrates stepped down after opposition parties failed to pass his latest austerity package, leading the country further into financial crisis and closer to requesting a bailout from the EU. German commentators on Friday argue Socrates shares blame for the failure.

As if Europe needed any more financial upheaval -- the resignation of Portugal's prime minister has hastened the likelihood of the country needing a bailout from the European Union. Jose Socrates quit after his latest austerity package was slapped down by opposition parties on Wednesday.

Socrates, who belongs to the center-right Socialist Party, had staked his political future on the new budget passing through parliament. But, as head of a minority government, he was relying on others to get it through -- and when they refused, Socrates went to President Anibal Cavaco Silva to hand in his resignation.

The crisis has made it all the more likely that Portugal will be forced to go cap in hand to the EU for a bailout, following in the footsteps of Greece and Ireland, which accepted help from Brussels last year, while at the same time increasing concerns over the stability of neighboring Spain.

Portugal Still Needs to Borrow More

Although Portugal's debt problems are not as severe as those of Greece or Ireland, it has suffered from poor growth, increasing its exposure to the debt crisis in the euro zone.

The austerity package included cuts to health care, social welfare spending and infrastructure investments amounting to 0.8 percent of gross domestic product. Annual increases in pension payments would also have been frozen until 2013. But the opposition parties considered the measures too drastic, and some politicians criticized Socrates for having gone directly to the EU for approval rather than seeking agreement over the measures at home first.

New elections are not possible until at least the end of May -- under the Portuguese constitution, there must be 55 days between the announcement of new elections and the actual vote -- but the country still needs to borrow more money to refinance its sovereign debt, €4.2 billion of which is due in April alone, and the cost of that could be unbearably expensive. That, in turn, would necessitate a loan from the EU.

But who is to blame for the fiasco? German commentators on Friday are highly critical of Socrates, whilst also recognizing that the crisis will have a big effect elsewhere in Europe.

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Aconselho vivamente a leitura dos editoriais alemães incluídos nesta peça. A vitimização não leva aquele indivíduo muito longe. Excepto cá, onde a memória só não é curta para os casos da arbitragem das décadas de 70 e 80. Não excluo a possibilidade de o mitómano acabar empatado com o outro Ken de Massamá.