Irish, Portuguese Toughen It Out While Greeks Rage
Irish and Portuguese voters appear to have resigned to austerity, unlike the Greeks.
When Greeks head to the polls on Sunday for the second time in two months to elect a new parliament, they are likely to return a radical leftist party to government that has promised to tear up the conditions of the European country’s two international bailouts and give up on austerity. With it, Greece could give up on the euro as it could soon lack the funds necessary to avert a sovereign default.
Meanwhile, in Ireland and Portugal, two other countries that have received financial assistance from their European peers when they teetered on the brink of bankruptcy, a majority of voters seems willing to accept the austerity measures that were implemented to balance public spending even if they may have deepened the recession in the short term.
The Irish economy is expected to grow by no more than .7 percent this year while the Portuguese could contract by up to 3 percent of gross domestic product.
Yet Irish voters in late May by a two-thirds majority voted in favor of what the left-wing opposition had dubbed the “austerity treaty” — the European fiscal compact which forces government to enshrine debt and deficit limits in their national laws.
Ireland has cut government spending levels, frozen public-sector wages and increased income taxes to reduce the budget shortfall to under 3 percent of GDP in 2015. The Irish today consume 12 percent less than they did before the bank crisis but support for the austerity measures and staying in the euro is strong.
Similarly, in Portugal, despite tax hikes and salary cuts of up to 20 percent for civil servants, protests and strikes have been underwhelming. The Portuguese appear resigned to the austerity measures and want to keep the euro.
In Greece, austerity has been tougher than in other countries. The economy continues to show negative growth and unemployment is higher — over 20 percent in Greece compared to 14 percent in Ireland and 15 percent in Portugal.
Greek voters want to stay in the euro, too, but seem to believe as leftist leader Alexis Tsipras does that other European states are bluffing when they warn that Greece may have to leave the currency union if it reneges on the commitments that the previous government made. “They should stop the fearmongering,” Tsipras said last month. He insists that the euro could come apart if a single member state departs and Germany won’t take that chance.
Voters in Ireland and Portugal aren’t willing to bet on that but they may if it turns out that Tsipras is right and the rest of Europe will continue to pour money into Greece even if it isn’t willing to rein in spending and liberalize its economy in return.