PIGS Countries Promise Never-Ending Headache to Europe

Greece has become one of the biggest problems for the European Union at the moment. The EU is desperately trying to take measures to help the shattered economy of the Mediterranean nation at the time when another country of the euro zone – Portugal – may soon repeat the Greek experience.

Photo: PIGS Countries Promise Never-Ending Headache to Europe

Portugal , like Ireland, Greece and Spain (PIGS countries), finds itself in a very complicated situation under the conditions of the economic crisis.

Ivan Rodionov, a professor of the Supreme School of Economics, said in an interview with Pravda.Ru that the current state of affairs in Portugal is very similar to that in Greece.

“Portugal does not correspond to traditional high living standards of the European Union. The tax system of this country is weak, and many try to evade paying taxes. Now this country will have to pay for it,” the expert said.

Portugal has been considered the poorest country of Western Europe during the recent years. The income per capita made up only 75 percent of the average index in the European Union. For comparison: the income per capita in Greece made up 98 percent of the average index in the EU.

Portugal has its attractions: wonderful beaches, wines, sardines. Lisbon and Porto are known for their places of interest. However, the income from tourism and the export of traditional products never allowed the nation to live without the support of the EU budget.

The situation in the south-west of Europe is close to critical. Portugal’s state debt is evaluated at 90 percent of its GDP. The inflation rate reached 9.3 percent, although a EU member should have this index on the level of three percent. In general, the economy of Portugal follows that of Greece.

The government of Portugal with Prime Minister Jose Sokrates at the head developed the stabilization and growth program on March 8. According to the program, the inflation rate should be reduced to 2.3 percent, and the state debt be kept on the current level. It is possible to achieve these goals only if the government cuts state expenses. This measure will inevitably lead to massive protests across the whole nation.

What does the Portuguese government offer? Wages and pensions will be frozen. This measure will affect practically every citizen of the country. Tax relief will be canceled. Business circles of the country will be very unhappy about that. State-owned shares in large companies will be sold. The state will therefore lay the burden of responsibility on the shoulders of entrepreneurs.

The parliament of Portugal will determine the fate of the program on March 25.

In the meantime, trade unions already express their deep concerns in connection with the tough economic plan. The nation’s largest trade union said that the program was developed to make common people pay for mistakes of the Portuguese government.

It is not ruled out that world’s major TV channels will soon start airing reports about massive protests in Lisbon and Porto.

The head of the European Commission and the former prime minister of Portugal Jose Manuel Barroso approved the anti-crisis program of the Portuguese program.

“Greece, Portugal and other PIGS countries will most likely have to cut their social guarantees. Trade unions in Europe are very strong, and they will say their word. As for the European Union on the whole, the current situation is good for its economy. The euro has been losing its value against the dollar, which shows a positive influence on the competitive ability of European goods,” the expert said.

Sergey Balmasov
Vadim Trukhachev

Pravda.Ru

Read the original in Russian

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