HispanicBusiness

Seventh review "cannot be a routine exercise," says PS leader in letters to Lagarde, Durao, Draghi, and Passos

Antonio Jose Seguro wrote to the troika's political chiefs yesterday to call for "a political assessment of the adjustment process" in Portugal, and informed the prime minister of the initiative.

In the four letters, which Diario de Noticias saw, addressed to Christine Lagarde, from the IMF, Durao Barroso, from the European Commission, Mario Draghi, from the ECB [European Central Bank], and to Passos Coelho, the Socialist secretary general expressed the same idea: "The seventh review of the Memorandum [of Understanding] (on Portugal's economic and financial adjustment programme) cannot be a routine exercise." He also issued a warning to the prime minister that "it is not enough to gauge one or other measure and commit the country to fresh austerity measures."

In Seguro's view, the forthcoming review - the troika team arrives on 25 February - "cannot be a technical exercise, verifying whether the memorandum is being implemented or not," "all the less so" can it "propose or accept new austerity measures, as occurred last September," because the country is on the brink of a "social tragedy" and "the time" has come "to say enough is enough!" - in other words, for Portugal and the troika institutions to proceed to a "political assessment of the adjustment process."

The three-page document to the troika's three political leaders marked out what the "political assessment" proposed by the PS [main opposition Socialist Party] would be. It "must devise a credible strategy for consolidating the public accounts, giving priority to economic growth and job creation." "It is no longer only an ideological choice," said the PS, "it is a matter of realism" and of "a moral obligation to look at Portugal's situation and have - [both] the government and the troika - the humility to acknowledge that your remedy failed."

The Socialist leader insisted in his letter that "the next review is crucial for the lives of the Portuguese," for which reason "the European Commission, the European Central Bank, and the International Monetary Fund must send political chiefs with decision- making capacity to Portugal."

Antonio Jose Seguro recalled that in "September 2012, I drew your attention to the failure of the theory of expansionary austerity and I referred to a situation verging on social breakdown that strongly advised a reassessment of the form of adjustment." The PS secretary general went on to list the indicators released over the last few days that supported his view, such as the highest rate of unemployment "of all time in Portugal," the drop in GDP, and the "degradation" of the external balance.

Seguro informed Passos Coelho of these letters, explaining that he took the initiative "fighting for the national interest."