Portugal - a case in point

A battle is waging over the leadership of Europe. Everybody seems polite but the wholly undemocratic crew of hangers-on that populate the European mothership are in a frenzy. Every time they raise a defense of their unseaworthy structure, market waves roar over their gunnels. So the senior officers have fallen out big time. And the water blows its holes through the weakest points in the ship. The whole edifice begins to list.

The defense traditionally put up for the good ship Europe is that her construction will prevent another European war. But she cannot even keep us safe from a storm. We have already seen the signs of her self serving and incoherent weakness in the face of the destruction of Yugoslavia. And now the replacement of elected leaders by bankers in Greece and Italy demonstrates the value in which democracy is held. If anything, her crazy accommodation to the very danger that threatens most of Europe, the vast surges of untamed capital that sweep the globe, makes another European war more, not less, likely

Sadly, at the moment little mentioned in the British news, Portugal is a case in point.

The Franco-German bankers and political leaders, cheered on by Cameron, have a policy for Portugal, and they have found a set of subordinates there to carry out their bidding. Portugal, as you know, is a great place. The economic crisis has made life difficult. The EU has magnified those difficulties by ten.

Here is the essence of the matter. Since 2005 up to now German workers produced 40 euros-plus every hour they were at work. (The whole eurozone together produced 35-plus an hour.) Portuguese workers produced 16.

This was not because German workers worked harder, or longer. It was because they worked WITH modern machines. German investment largely gets used in Germany and is spent on making those modern machines.

What does the EU propose that its subalterns carry out in Portugal to bridge the gap and keep the hungry debtors away? Cut the income of all public sector workers by 25% from 2010 levels (following on from the last round of cuts.) Employers contributions to social security are to be cut, local councils will be merged, employment law is to be 'reformed.' The misery of the worker, the unemployed, the poor and the sick will 'bridge the gap.' It is the lash that is to be the new machine to increase productivity.

Finance Professor  Pedro Santa Clara (quoted in the FT) says
'Growth involves pain and creative destruction. But in Portugal we would all rather be poor together than tolerate some advancing at the expense of others.' What a shame!

The Portuguese tore down Salazar's fascism in the 1970s to create a modern Portugal. They just held the biggest general strike 'in more the 30 years' to challenge the new measures.

A different view is emerging of how to narrow the gap; starting with taking control of the very uncreative destruction wrought by capital and the 'free' markets.