He may be on his way out as prime minister of Portugal but Jose Socrates was at the centre of nearly everything at the start of the EU’s two-day summit in Brussels.
Socrates resigned when Portugal’s parliament rejected his latest dose of austerity for the beseiged economy, but some of his European partners are keen to see Portugal stick to its guns lest its economic problems spread. German leader Angela Merkel was blunt.
“Now everyone in positions of responsibility today in Portugal, or those who hold those positions tomorrow have to invest in the austerity programme so that market confidence increases,” said Merkel.
Although today the OECD said it did not think a recovery package was inevitable for Portugal immense pressure is building on Lisbon to accept an EU bailout in order to protect the euro, but the terms are offputting, as the Irish and Greeks have discovered.
“I don’t think there is a risk of defaulting debt because Portugal has a margin of financing and it’s a problem of liquidity and not of solvency. But the fact is that while waiting for an election we will lose time: Once it’s over I hope we gain a stronger basis for government in Parliament,” said the European Policy Centre’s Maria João Rodrigues.
The Portuguese crisis has derailed the summit’s original aim, which was to publish its masterplan for dealing systematically with debt-burdened member states and reasssure the markets. That now will not happen until the early summer.
“Divided over Libya, the EU’s 27 members must now tackle the euro, and there may well be last-minute problems here, too. In the background of the Portuguese crisis it appears both Germany and Finland don’t want to sign up to certain elements of the economic security pact,” says euronews’ man in Brussels Sergio Cantone.