Release Political Committee of the Central Committee

Portugal and the international economic crisis

1. The recent developments in the international financial situation confirm the apprehensions and alerts expressed by the PCP since last August. In fact, the high risk mortgage crisis in the USA was just a symptom of a very serious and deep crisis affecting the whole international monetary system, with as yet incalculable effects on the economies of the whole world, including that of our country.

To the PCP, as the economic results, both of the big financial groups as well as those of the most regarded companies, are becoming public and there is the awareness of the great instability in all the stock markets, there is a growing conviction that the US economy is facing a serious crisis and the remaining world economies, including the European, are already showing signs of a strong downturn in the economic growth as proved by the lowering expectations in the 2008 economic growth of the German and Spanish economies.

The PCP considers that the crisis, that had its fulcrum in the North American financial system and whose detonator was the real estate speculation, is an expression of the systemic crisis of capitalism based upon the increasing financial speculation dissociated from the real economy, and also, upon the degradation of the wages of the working masses, accompanied by an imposition to resort to banking loans, to buy real state as well as for personal consumption. To the PCP, this is just another crisis of overproduction, faced with the poor buying power of the popular masses, in which the miraculous solution – easing of bank loans – seems to be collapsing under this profound crisis of the international financial system.

2. The PCP draws attention to the irresponsible attitude of the PS [Socialist Party] government which persists in the concealment and underestimation – as confirmed by the completely unrealistic forecasts on the national economic growth – of the true significance of this crisis and its repercussions on our country, specially when considering the increasing vulnerability of our economy, a result of many years of right wing policies and which are themselves at the root of the present crisis.

For an economy such as the Portuguese, exposed, vulnerable, unarmed and depending on a handful of capitalist countries, the present financial crisis will inevitably have a strong negative impact. But it would be a mistake to think that the Portuguese government holds no responsibility for this situation. The stagnation of the economic growth, the drop in public and private investment, the increasing finantialization of our economy instead of the defence of the productive apparatus, the obsession with the budget deficit, the submission to the European Union guidelines, are structural elements of the total failure of a policy to solve the problems of the country and which, in view of this crisis tend to amplify.

3. The PS government, both during its recent European Union presidency, as well as in its international relations, only tried to conceal reality and align with the big economic and financial interests, as can be easily proved by all the forecasts on the economic growth in our country (well above the reality) and in the permanent attitude of subservience and subordination of the needs of the country and of the Portuguese people when faced with the insatiable greed of big capital.

A subservience of the PS government confirmed by the embarrassed silenced on the recent meeting of the heads of government of Germany, the United Kingdom, France and Italy which, confirming the alerts by the PCP on the consequences of the new European Union treaty, constitute a real directorate of the great powers and great economic interests, trying to defend their own interests ignoring and in conflict with the needs of the remaining 23 EU countries.

4. To the PCP, it is unacceptable that once again the workers, the pensioners and the populations pay the costs of the present financial crisis – as the PS government is preparing to do – once again leaving aside those who are really responsible for and benefited from the policies of speculation and finantialization of our economy that befell on the country, that is, the great economic groups and the financial capital.

In view of this situation, the PCP took the initiative to summon the Finance Minister and the Governor of the Central Bank of Portugal to the [Parliament] Budget and Finance Committee, a hearing that took place last January 18 where once again we demanded policies and measures to combat recession namely, abandoning the obsession on the budget deficit, promotion of public investment, support to national production against the growing finantialization of the economy, the diversification of foreign markets, a fairer distribution of income and questioning the role of the European Central Bank. Measures that the PS government persists in opposing, thus increasing the risks of the negative impacts of this crisis on the living conditions of the Portuguese people.

5. Anticipating possible manoeuvres by the PS government, under the excuse of the present international situation, to impose renewed sacrifices on the workers and the People, persisting and worsening a policy whose failure can be measured by the growing social injustice and inequalities, economic stagnation, increasing foreign dependence, increase in unemployment, poverty and social exclusion, the PCP draws attention to the need for a different course and a new policy that, as the PCP stressed in its National Conference on economic and social issues and a break with the right wing policies.

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