Home » Austerity In Portugal – What Does It Mean To You?

Austerity In Portugal – What Does It Mean To You?

Since Portugal accepted the bailout package from the EU harsh austerity measures have been implemented to reduce the national debt to pay off the loan. There have been drastic cuts to healthcare, education and some public sector workers even will lose their holiday pay and annual bonus. IVA Tax hikes were introduced on services and essential goods plus unemployment is now over 14% as businesses fail and more public sector workers are laid off.

The austerity measures and price hikes have also had a crippling effect on the budgets of many expats as their income from pensions and savings, already hit by poor exchange rates and low interest rates, fail to keep pace with inflation.

In pre-retirement days you calculated how much you “thought” you would need to live on, did your sums and set sail for a new life in the sun.I think this post in the Portugal forum "Dream or Nightmare?" highlights the plight many expats are facing, not just in Portugal, but also in Spain, Italy and Greece.

The cost of living in Portugal over the last year has risen dramatically and many expats now struggle with the increased living costs. Couple this with poor exchange rates and low interest on savings and the future looks bleak. The word Austerity hangs like a black cloud over Portugal, but as they say every cloud has a silver lining. The sun shines, the sky is blue and the beaches are beautiful.

But this article is not just about expats it’s about the Portuguese people and the misery these measures have caused. I was once told I portrayed Portugal as a poor country, but scratch the surface and look beyond the beautiful marinas, luxury cars, villas and grand hotels. After talking to real working class in the Algarve this is what I found – people working long hours for low pay, struggling to make ends meet. Is it any different in other areas of Portugal? I don’t know.

To verify my “assumption” I created a simple survey and a Portuguese friend kindly asked some people she knew to participate.

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Fifteen Portuguese people completed the survey: 2 were self-employed, 7 employed, 4 unemployed, 1 retired and 1 student. Their status ranged from office workers, builders, management to a student in further education.

When I asked how the austerity measures had affected them personally in terms of loss of income, replies ranged from -10% to -100%, however the majority seemed to have lost around 20%.

I then asked how much their household bills had increased since the austerity measures had been implemented and their responses ranged from increases of between 15 and 20% for utilities and their weekly food bill had increased by around 15%. This did not include increased fuel prices, tolls and price hikes in other areas. You don’t have to be an economist or a rocket scientist to realize there is not much left in the purse, if anything, for little luxuries such as eating out and non-essential items. If you lost 20% of your income plus deal with pretty hefty rises on essential items how would you manage?

I also asked how the austerity measures made them feel and I received a whole range of responses which included.

“I am very sad because my family can’t go anywhere as diesel is very expensive.”

“The measures make me feel sad and very angry because we are living in a corrupt country!”

“Austerity measures make me feel angry and poorer.”

“I feel disgusted with this situation because we are becoming poorer every day and we pay more taxes.”

“I feel very angry with the situation we live, we didn’t get the country in the situation the mistakes of our government did.”

“I am very angry and very sad too, because I think there are many people who do not have a job and don’t have money to buy food.”

“The measures make me feel sad because we pay for the mistakes of others.”

“The measures make me feel sad because I don’t have a job.”

“Frustrated as not responsible for what is happening and sad at having to lay of employees.”

“I feel very poor, very sad and very angry. The austerity measures are difficult and I can’t buy anything. We pay for the mistakes of our politicians.”

And finally a comment made by another Portuguese friend.

“I am only one of many who have become depressed and cannot cope without medication. I still have a job! Can you imagine how families who have one or both parents out of work are feeling?”

However, when I asked if they thought Portugal should remain in the Euro there was a resounding “Yes”.

I ask myself why?

As I walk through some of the towns in the Algarve it’s hardly surprising to see several shops and restaurants have already closed, and the newly created out of town retail parks empty. No money, no customers, no sales so more job losses as even more shops, restaurants and even hotels close down.

What impact have the austerity measures had on your lifestyle?

To discover more about everyday life in Portugal visit my blog Piglet in Portugal or follow me on Twitter at twitter.com/portugalpiglet

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