Portugal: Massive austerity measures to follow bailout

[Hannah Bell]

The European Union (EU) is demanding massive austerity measures in return for a multi-billion euro bailout requested by the Portuguese government on Thursday.

EU finance ministers met yesterday at Godollo, near the Hungarian capital, Budapest, to discuss the size of the bailout and how it will be repaid. Around two-thirds of the expected €80 billion loan, equivalent to half of Portugal’s GDP, will come from the EU and the remainder from the International Monetary Fund.

Portugal is the third eurozone country after Greece and Ireland to request a bailout. The request has increased speculation that Spain—the fourth largest economy of the 17 Eurozone countries—will also request help.

“The package must be very strict,” Finland’s Finance Minister Jyrki Katainen declared, adding that in exchange for loans, Lisbon will have to slash its budget. Moreover, austerity measures “must be harder than that the parliament in Portugal voted against… here must be some structural reforms, fiscal consolidation alone is not enough....” Fundamentally, the Portuguese bourgeoisie set out to provoke a crisis so as to bring in the EU and the IMF....

http://www.wsws.org/articles/2011/apr2011/port-a09.shtml

[xchrom]

1. Austerity hysteria: the new new. Nt

[WinkyDink]

2. The poor must be punished.

[blindpig]

3. The people will hit the streets in unprecedented numbers.

It's gonna be a Red summer.

[badtoworse]

4. The same thing is going to happen here

The only question is how soon. We can't keep borrowing trillions of dollars indefinitely to maintain a lifestyle we cannot afford. We are very near the authorized debt limit and I believe there will be huge fights to get it raised. Even when it is raised, the question remains as to how well US debt will sell - rates may have to rise substantially.

The biggest risk is the world starts using something other than dollars as a reserve currency. If that happens, we are truly fucked because it will be much more difficult to borrow in dollar denominated debt instruments. If and when that happens, you will see budget cutting and austerity here that will make the current budget battle seem insignificant.

[Starry Messenger]

5. k&r

[ck4829]

6. The powerful get bailouts, everyone else has to sacrifice.

Seems to be SOP.