Thursday

13th May 2021

Portugal has 'no time' to settle democratic mandate concerns

The European Commission has rubbished concerns that the caretaker administration in Portugal does not have a democratic mandate to negotiate a bail-out package and its attendant stringent austerity and economic restructuring, saying Lisbon does not have time for such concerns.

"Democratic legitimacy? It's not necessary. Apparently they had some mandate when they made the request last night. So if they were empowered last night to make the request, they are empowered to progress with negotiations," commission economy spokesman Amadeu Altafaj told EUobserver. "They simply cannot wait."

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Lisbon: The government can negotiate a short-term assistance package but nothing longer (Photo: fnkftw)

Analysts have worried that after the government resigned on 23 March, a caretaker administration would not have the legitimacy to negotiate the terms of what in the case of Greek and Irish bail-outs have turned out to be a thorough re-organisation of the economy. In both cases, virtually all economic decision-making has in effect been outsourced to EU, IMF and ECB experts for years to come.

Prime Minister Jose Socrates battled for months pressure to apply for the bail-out frightened of the loss of sovereignty he saw Athens and Dublin experience.

"We have spoken to the opposition and they have backed the request, so there is agreement on this across the parties," Altafaj added.

He said that the financial assistance will not be a bridging loan to keep the lights on until after the 6 June general election, but a full bail-out package. According to sources close to the discussions, the sum could amount to as much as €90 billion.

He added that the memorandum of understanding with the caretaker government would not be provisional pending the vote and the endorsement of the agreement by the parliament, but that the future government would be bound by its terms.

The new government cannot make changes to the agreement, he said.

"It's not their programme any more. It's ours," he said. "It's being negotiated with the EU. Now we're negotiating it together. It's our programme as well. It's not the same as Socrates' programme of a few weeks ago," he said, referring to the austerity measures that were defeated by the parliament resulting in the resignation of the government.

The commission did however hold out the possibility of tweaking any agreed structural adjustment programme under a new administration in six months' time, but that is it.

"What is possible is that every six months, after the election for example, the commission along with the ECB re-examines the situation and discusses with the Portuguese authorities possible changes to the programme," he continued, referring to the rules governing the eurozone's bail-out mechanism.

According to the bail-out rules, a qualified majority in the Council of Ministers of the EU, representing the member states, then would decide whether to allow any lightening of conditions.

"We're not tying the hands of the government for years," he said.

European Commission experts are to head to the Portuguese capital on Monday along with their counterparts from the European Central Bank to make an assessment of the country's finances. IMF figures are also ready to travel to Lisbon should a similar request for assistance be made to the Washington-based lender.

Negotiations are expected to proceed rapidly, from one to three weeks from the initial request.

"It's just one single negotiation between their ministers and us. It can go very quickly," said an EU official.

Andre Freire, a political scientist with Lisbon University Institute, told EUobserver that the caretaker administration has emergency powers to sign a temporary agreement, but not for any long-term programme of adjustment.

"The problem the caretaker government has is not a constitutional one. It's a transitory government and they have transitory powers," he said. "It is an extreme situation because of the downgrades and so on, so they certainly have the power to take action in this emergency."

"The problem is that they have no political support to sign an agreement for more than one month or three months or something like that," he continued.

"Any long-term agreement should be left open for the incoming government to change."

Indeed, on Thursday, Portuguese government spokesman Pedro Silva Pereira said the caretaker government "clearly can't commit to long-term goals."

Luxembourg tax scandal may prompt EU action

An investigation into Luxembourg's tax regime has uncovered how the Italian mafia, the Russian underworld, and billionaires attempt to stash away their wealth. The European Commission has put itself on standby amid suggestions changes to EU law may be needed.

Investigation

Portugal vs Germany clash on EU corporate tax avoidance

Portugal's taking over the EU presidency puts the tax transparency law for corporations - which has been fought over for years - to a vote in the Council of Ministers. The resistance of the German government has failed.

News in Brief

  1. No EUobserver newsletter on Friday 14 May
  2. Germany stops Facebook gathering WhatsApp data
  3. Italy rebuts reports of EU deal with Libya
  4. MEPs demand EU states protect women's reproductive rights
  5. At least nine dead in Russia school shooting
  6. Bulgaria interim government appointed until July election
  7. German priests defy pope to bless same-sex couples
  8. New EU public prosecutor faults Slovenia

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Council enters into formal relations with European Parliament
  2. Nordic Council of MinistersWomen more active in violent extremist circles than first assumed
  3. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  4. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance
  5. Nordic Council of MinistersThe Nordic Region can and should play a leading role in Europe’s digital development
  6. Nordic Council of MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance

Latest News

  1. EU aims at 'zero pollution' in air, water and soil by 2050
  2. French police arrest Luxembourg former top spy
  3. Vaccine drives spur better-than-expected EU economic recovery
  4. Slovenia causing headaches for new EU anti-graft office
  5. 'No place to hide' in Gaza, as fighting escalates
  6. EU chases 90m AstraZeneca vaccines in fresh legal battle
  7. Fidesz MEP oversees FOI appeals on disgraced Fidesz MEP
  8. Belgium outlines summer Covid relaxation plans

Join EUobserver

Support quality EU news

Join us