Pedro Passos Coelho returned the centre-right to power in Portugal in 2011, a neo-liberal economist. The Socialists had been governing for six years, and the country was deep in the grip of the financial crisis that was threatening its membership in the euro.
Under Coelho’s leadership, the Social Democratic Party won its best result for 20 years, but it fell short of an absolute majority, and had to team up with the outright conservative CDS-PP.
Coelho said: “Our priorities are clear: stabilise public finances, help those most in need, and make the economy grow; to create employment. We will respond to the grave financial situation with financial stabilisation.”
Parliament drew into battle formations to debate how to make public spending sustainable and reduce sovereign debt in line with the 78 billion euro rescue plan signed with the EU, International Monetary Fund and European Central Bank.
Coelho announced what must go: “The 2012 budget eliminates the Christmas bonus and vacation pay for all civil servants receiving a salary of more than 1,000 euros per month.”
Protest followed protest in the streets: Coelho raised wage earners’ contributions to social security from 11% to 18%, and reduced employers’ contributions to that figure. The grumbling stayed within manageable proportions, however, and the premier held his line.
“If I ever have to lose an election in Portugal to save the country, as they say, the hell with elections, what matters is the country.”
Unfazed, Coelho called on the Portuguese to “leave their comfort zone”, and many listened. In 2014, 2.3 million Portuguese were living outside their country, the EU member with the highest incidence of outward migration.
The sacrifices paid off. After three years of budget austerity, Portugal was out from under international monitoring.
Coelho said: “The 17th May, 2014, will go down in history as the day of all the Portuguese, because without their efforts we would not have come so far. It’s not the government’s day, or a political party’s. It belongs to us all.”