system failure — The European industry of sell-off public property

Just like Michael Hudson predicted.

the unbalanced evolution of homo sapiens
The European industry of sell-off public property

system failure due to insufficient evolution?

Ambrose Evans-Pritchard — Portugal's anti-austerity Left take power in watershed moment for the euro

The president threatened to sack the new government if it challenges the EU's Fiscal Compact, deemed a formula for economic depression by Keynesians

Portugal at the crossroads.

The Telegraph
Portugal's anti-austerity Left take power in watershed moment for the euro
Ambrose Evans-Pritchard

Bill Mitchell — The tale of two nations – democracy dies in Portugal and lives in Canada

The tale of two nations – two monetary systems – two continents – Canada and Portugal. It is reasonable to assume that when voters in so-called free democracies elect members to their parliaments who then freely coalesce across ‘party’ lines to form an absolute majority that they will be given the right to govern irrespective of the ideology they represent and the policies that they have put forward to the voters to win their approval. That seems to happen in Canada. It definitely doesn’t happen in Portugal. The Portuguese President dropped his so-called “bomba atómica” last week when he refused to endorse the coalition of parties that held the absolute majority of seats in the Assembly as a result of the recent national election. He indicated that he would not allow a government that would relax the fiscal austerity and consider exiting the Eurozone. His motivation was that financial markets had to remain appeased. It was an extraordinary intervention and will come back to haunt the nation given that the conservative austerity government will lose its authority as soon as it puts its platform to the new Parliament for endorsement (within the next 10 or so days). Then the nation is in chaos and the President will be compelled to accept the anti-austerity left coalition or something worse will happen. But, happily, in Canada, the election of the Liberal Party is a rejection of the obsession with fiscal surpluses – at least for now.…

Bill Mitchell – billy blog
The tale of two nations – democracy dies in Portugal and lives in Canada
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Tim Fenton — Don’t Menshn Portugal

Contra AEP and Jacques Sapir.

Zelo Street
Don’t Menshn Portugal

Tim Fenton

Jacques Sapir — Lisbon's silent coup d'etat

Not just AEP at The Torygraph.

A great deal has been said in the press, in France in particular, that the right coalition emerged victorious in the recent election for the legislature in Portugal. This is false. The right parties, led by Prime Minister M. Pedro Passos Coelho, won only 38.5% of the vote and lost 28 seat in parliament. A majority of Portuguese voters voted against the current austerity measures, in fact 50.7%. These voters cast their votes for the moderate left but also for the Portugese Communist Party and other factions of the radical left. De facto, the Socialist has Party 85 seats, the Left Bloc (radical left) 19, and the Communist Party 17. Out of 230 seats in the Portugese Parliament, this gives 121 to the anti-austerity forces, when the absolute majority is 116…

The socialists and the left bloc clearly said that this accord [imposing austerity] must be revised. This is what motivated President Cavaco silva in his decision to reject the program for governance presented by the Left. But the motivs went further. He said: "After all the sacrifices made in the framework of an important financial accord, it is my duty and within my constitutional prerogatives, to do everything possible to prevent false signals from being sent to financial institutions and international investors." It is this statement that poses the real problem. What M. Cavaco thinks about a government of the united left is his right, and it is very likely the case. But in a parliamentary republic, as Portugal actually is, it is not in his power to interpret future intentions in order to oppose the will of the voters. If a coalition of the left and extreme left has a majority in Parliament, and if it presents — as is the case — a program for government, he must give it a chance. Any other decision is as an unconstitutional act, a "coup d'Etat."

RussEurope
Lisbon's silent coup d'etat
Jacques Sapir

On a beaucoup dit, en France en particulier, dans la presse que la coalition de droite était sortie vainqueur des dernières élections législatives portugaises. Ceci est faux. Les partis de droite, emmené par le Premier-ministre M. Pedro Passos Coelho n’ont réuni que 38,5% des suffrages, et ont perdu 28 sièges au Parlement. Une majorité d’électeurs portugais a voté contre les dernières mesures d’austérité, en fait 50,7%. Ces électeurs ont porté leur vote sur la gauche modérée mais aussi sur le Parti Communiste Portugais et d’autres formations de la gauche radicale. De fait le Parti Socialiste portugais a 85 sièges, le Bloc de Gauche (gauche radicale) 19 et le Pari Communiste portugais 17. Sur les 230 sièges du Parlement portugais, cela en donne 121 aux forces anti-austérité, quand la majorité absolue est de 116[2].… 

Les socialistes, et le « bloc de Gauche » ont clairement dit que cet accord devait être révisé. C’est ce qui a motivé le Président Cavaco Silva dans sa décision pour rejeter le projet de gouvernement présenté par la Gauche. Mais, les attendus de sa déclaration vont encore plus loin. Il a dit : « Après tous les importants sacrifices consentis dans le cadre d’un important accord financier, il est de mon devoir, et dans mes prérogatives constitutionnelles, de faire tout mon possible pour empêcher de faux signaux d’être émis envers les institutions financières et les investisseurs internationaux[3] ». C’est cette déclaration qui pose véritablement problème. Que M. Cavaco Silva pense qu’un gouvernement de la gauche unie puisse conduire à un affrontement avec l’Eurogroupe et l’UE est son droit, et c’est même très probablement le cas. Mais, dans une république parlementaire, comme l’est le Portugal actuellement, il n’est pas dans son pouvoir d’interpréter des intentions futures pour s’opposer à la volonté des électeurs. Si une coalition de gauche et d’extrême-gauche a une majorité au Parlement, et si elle présente – ce qui était le cas – un programme de gouvernement, il doit lui laisser sa chance. Toute autre décision s’apparente à un acte anticonstitutionnel, un « coup d’Etat ».

Reuters — Portugal left vows to topple government with no-confidence vote

Portugal's opposition Socialists pledged on Friday to topple the centre-right minority government with a no-confidence motion, saying the president had created "an unnecessary political crisis" by nominating Pedro Passos Coelho as prime minister.

The move could wreck Passos Coelho's efforts to get his centre-right government's programme passed in parliament in 10 days' time, extending the political uncertainty hanging over the country since an inconclusive Oct. 4 election.

Coelho was named prime minister on Thursday after his coalition won the most votes in the national election but lost its majority in parliament, which swung to leftist parties.
This set up a confrontation with the main opposition Socialists, who have been trying to form their own coalition government with the hard left Communists and Left Bloc, who all want to end the centre-right's austerity policies.

Reuters (UK edition)
Portugal left vows to topple government with no-confidence vote
Axel Bugge and Sergio Goncalves

Ambrose Evans-Pritchard — Eurozone crosses Rubicon as Portugal's anti-euro Left banned from power

Constitutional crisis looms after anti-austerity Left is denied parliamentary prerogative to form a majority government.

Portugal has entered dangerous political waters. For the first time since the creation of Europe’s monetary union, a member state has taken the explicit step of forbidding eurosceptic parties from taking office on the grounds of national interest.

Anibal Cavaco Silva, Portugal’s constitutional president, has refused to appoint a Left-wing coalition government even though it secured an absolute majority in the Portuguese parliament and won a mandate to smash the austerity regime bequeathed by the EU-IMF Troika.

Greece gone exponential. Dictatorship descends on Portugal! Democracy in the EZ implodes.

Democracy must take second place to the higher imperative of euro rules and membership.

AEP summarizes:

Europe’s socialists face a dilemma. They are at last waking up to the unpleasant truth that monetary union is an authoritarian Right-wing enterprise that has slipped its democratic leash, yet if they act on this insight in any way they risk being prevented from taking power.

Brussels really has created a monster.

The term "authoritarian Right-wing enterprise" sounds like fascism or dangerously close to it.

The Telegraph
Eurozone crosses Rubicon as Portugal's anti-euro Left banned from power
Ambrose Evans-Pritchard

Ambrose Evans-Pritchard — Defiant Portugal shatters the eurozone's political complacency

Antonio Costa, Portugal's Socialist leader and son of a Goan poet, has refused to go along with further pay cuts for public workers, or to submit tamely to a Right-wing coalition under the thumb of the now-departed EU-IMF 'Troika'.

Against all assumptions, he has suspended his party's historic feud with Portugal's Communists and combined in a triple alliance with the Left Bloc. The trio have demanded the right to govern the country, and together they have an absolute majority in the Portuguese parliament.

Mr Costa's hard-Left allies both favour a return to the escudo. Each concluded that Greece's tortured acrobatics under Alexis Tspiras show beyond doubt that it is impossible to run a sovereign economic policy within the constraints of the single currency.

The Communist leader, Jeronimo de Sousa, has called for a "dissolution of monetary union" for the good of everybody before it does any more damage to the productive base of the European economy.

His party is demanding a 50pc write-off of Portugal's public debt and a 75pc cut in interest payments, and aims to tear up the EU's Lisbon Treaty and the Fiscal Compact. It wants to nationalize the banks, reverse the privatisation of the transport system, energy, and telephones, and take over the "commanding heights of the economy"

Catarina Martins, the Left Bloc's chief, is more nuanced but says that if the Portuguese people have to choose between "dignity and the euro", then dignity should prevail. "Any government that refuses to obey Wolfgang Schauble must be prepared to see the European Central Bank close down its banks," she said.

Here we go again. Let's see if these folks fare any better than Syriza. Portugal might not be able to do it, but when it becomes Spain or Italy's turn, then the game will change and so will the odds. It's just a matter of time.

The EU Fiscal Compact requires Portugal to cut its public debt from 127pc to 60pc of GDP over twenty years, under pain of sanctions, with parallel cuts in Italy, Spain, France, and Belgium that feed on each other….

Go figure.

The currency bloc is in worse shape on almost every metric than it was before the Lehman crisis. Debt levels are 35 percentage points of GDP higher. EMU-wide unemployment is stuck at 11pc. The credibility of eurozone leadership is in tatters.

Powerful populist forces are waiting in the wings in Spain, Italy, and France. The events in Portugal have shown that every election in Southern Europe is a now an "event risk"….

The Telegraph
Defiant Portugal shatters the eurozone's political complacency
Ambrose Evans-Pritchard

J. W. Mason — Guest Post on Portugal

(In comments to one of the posts here on Greece, Tiago Lemos Peixoto posted some observations on the situation in Portugal. In response to some questions from me, he sent the message below. We don’t hear much in the US about the the political-economic situation in Portugal, and I thought Tiago’s discussion was interesting enough to post on the front page. I’ve posted his original comment first, and then then the followup. My questions to him are in italics. JWM.)

J. W. Mason
Guest Post on Portugal
JW Mason | Assistant Professor of Economics, John Jay College, City University of New York

Mehreen Khan — Europe braces itself for a revolutionary Leftist backlash after Greece

A pre-revolutionary fervour is sweeping Europe.

“The atmosphere is a little similar to the time after 1968 in Europe. I can feel, maybe not a revolutionary mood, but something like widespread impatience”.

These were the words of European council president Donald Tusk, 48 hours after Greece’s paymasters imposed the most punishing bail-out measures ever forced on a debtor nation in the eurozone’s 15-year history.

“I am really afraid of this ideological or political contagion”
Donald Tusk

A former Polish prime minister and a politician not prone to hyperbole, Tusk’s comments revealed Brussels’ fears of a bubbling rebellion across the continent.

“When impatience becomes not an individual but a social experience of feeling, this is the introduction for revolutions” said Tusk.

“I am really afraid of this ideological or political contagion.”….

I'm betting the Right to win this, not the Left. There is no Left. It's a myth. The Right is real and they have the swastika tattoos to prove it. Just (half) kidding.

The Telegraph
Europe braces itself for a revolutionary Leftist backlash after Greece
Mehreen Khan

Alexrpt — These three charts, and soup kitchen line, show Portugal’s EU austerity program success

Greece is not the only EZ country in depression.

Red Pill Times
These three charts, and soup kitchen line, show Portugal’s EU austerity program success
Alexrpt

Lord Keynes — Greece promises to Balance Budget: What the hell just happened?

Any government that promises to remain within the EU can do nothing. The government has to credibly threaten to leave the EU, and maybe even take unilateral steps like suspending loan re-payments and implementing capital controls. The EU can clearly humiliate poor little Greece, but what happens when voters in Spain, Italy or even France act on their hatred of the austerity and their governments start to listen?

I would go further and say that there is no future in the EMU. Europe is not going to go forward to institute either a political union or even a fiscal union. The project is doomed and the faster than countries recognize this and bail, the less their populations will suffer and the threat of conflict in Europe will be reduced.


The Continental Europeans need also to recognize that the US and UK are run by Wall Street and the City, and act accordingly.

Social Democracy For The 21St Century: A Post Keynesian Perspective
Greece promises to Balance Budget: What the hell just happened?
Lord Keynes

Ambrose Evans-Pritchard — Germany faces impossible choice as Greek austerity revolt spreads

EU elites who forced a currency experiment on countries not ready for it have only themselves to blame

Eurocrats, when you lose AE-P you have a problem. But he is just telling it like it is. The eurocrats are in denial and their project is collapsing. Unlike the US and UK, they don't have a domestic security force to enforce it.

The kicker.

Mr Varoufakis is trying to limit the damage, praising Mrs Merkel as the "most astute politician" in Europe, and Mr Schauble as the "only European politician with intellectual substance" - a wounding formulation for the others. He has called on Germany to cast off self-doubt and assume its roll as Europe's benevolent hegemon, almost as if he were evoking the glory days of the Holy Roman Empire when pious German emperors stood as guarantors for Christendom. 

This is the only pitch that will work. Angela Merkel has risen above her narrow East German outlook and her fiscal platitudes of the early crisis to emerge as the soul-searching Godmother of Europe and the last credible defender of its unity. But even Mrs Merkel can be pushed too far.

Yanis really thinks that?

The Telegraph
Germany faces impossible choice as Greek austerity revolt spreads
Ambrose Evans-Pritchard | International Business Editor of The Daily Telegraph

gjohnsit — The pitchforks are coming out in Europe

When you think of governments ready to fall in Europe, you probably think of Greece or Spain. Instead it is Italy that is warning of a violent insurrection.

 Events in Italy are turning serious. President Giorgio Napolitano has warned of “widespread social tension and unrest” in 2014 as the Long Slump drags on.
   Those living on the margins are being drawn into “indiscriminate and violent protest, a sterile lurch towards total opposition”

The protest movement in Italy is literally called the Pitchfork Movement (Movimento dei forconi). Their demands are no less than the overthrow of the government.

Daily Kos
The pitchforks are coming out in Europe
gjohnsit

Mario Queiroz — Portugal’s Carnation Revolution under the Shadow of the Troika

Political unrest rising in Portugal over the consequences of austerity.

Inter Press Service
Portugal’s Carnation Revolution under the Shadow of the Troika

By Mario Queiroz

Zero Hedge — European Commission 'Threatens' Portugal - Get Your Constitutional Court In Line  Submitted by Tyler Durden

It seems, despite the constant "it's all fixed" banter, that Portugal's Constitutional Court decision that the Troika-imposed austerity is unconstitutional (as we discussed in detail here and here) has a few of the 'elites' nervous. And so, late on a Sunday night European time, they launch a press release that is about as passively aggressive as they come, "any departure from the program's objectives, or their re-negotiation, would in fact neutralize the efforts already made and achieved by the Portuguese citizens, namely the growing investor confidence in Portugal, and prolong the difficulties from the adjustment... it is a precondition for a decision on the lengthening of the maturities of the financial assistance to Portugal."

Zero Hedge
European Commission 'Threatens' Portugal - Get Your Constitutional Court In Line
Submitted by Tyler Durden

That currency union thing isn't looking so good now, is it?

Zero Hedge — Portugal Considers Paying Public Workers In Treasury Bills Instead Of Cash

As reported late on Friday, just as the market closed, the Portuguese constitutional court decided that several provisions of the country's 2013 budget were not constitutional. According to the high court, cuts in wages and pensions of public employees were unfair ... because they targeted only the public sector....

A solution has, luckily, presented itself: bypass the unconstitutional provisions by paying government workers not in cash, but in government bills!

Zero Hedge
Portugal Considers Paying Public Workers In Treasury Bills Instead Of Cash
Submitted by Tyler Durden

Portugal goes for broke to avoid going broke. Neoliberal nightmare ensues.

Budget raises taxes and envisages retrenchment of 12,000 public-sector staff as recession grips the economy.

Portugal's government has announced its 2013 budget, which outlined the harshest measures yet under the country's $101bn rescue plan.

Vitor Gaspar, finance minister, confirmed on Monday that the average income tax rate would rise from 9.8 per cent to 11.8per cent.

He said the budget was the only way for the country to meet its targets under the bailout.

The government also announced spending cuts worth $3.4bn, while around 12,000 public-sector workers were to lose their jobs.

The cuts are intended to reduce the budget deficit of Portugal to 4.5 per cent in 2013, which is still 1.5 per cent more than the target of three per cent set by the European Union.

The budget faced opposition from anti-government protesters, as protests took place outside the parliament buildings.

Al Jazeera
Portugal unveils austere 2013 budget

Jacob Funk Kirkegaard — Protests, riots, rightists rage in Europe – but to no ill effect

Political pressures are rising again in Europe. This column argues that reactions in parliaments, central banks and on the street are well within the bounds of predictable reactions to hard times. These developments change nothing of significance in the calculus concerning the eventual success of the Eurozone crisis response.

VOX
Protests, riots, rightists rage in Europe – but to no ill effect
Jacob Funk Kirkegaard | Research Fellow, Peterson Institute for International Economics

Blood running in the streets? No big deal to those in the corner offices.

Al Jazeera — Anti-austerity rallies hit Spain and Portugal

Protesters surround parliament in Madrid, while thousands take to the streets of Lisbon in new anti-austerity protests.

Al Jazeera
Anti-austerity rallies hit Spain and Portugal