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Leave the Euro Debate Explodes in Portugal
11 June 2013
Within weeks of publication last April, economist Joao Ferreira do Amaral’s book Why We Should Leave the Euro, hit the top of the best-seller list in Portugal and has become the subject of general discussion, with its author being interviewed and invited to speak all over the place. Ferreira do Amaral teaches at the Technical University of Lisbon and was formerly an official in the Ministry of Finance under the Socialist Party governments of Mario Soares and Jorge Sampaio. He strongly opposed adopting the euro from the beginning, but as he told the Wall Street Journal, "thankfully, this issue has stopped being taboo, and now there is a lot of discussion here and abroad." That interview was published on May 27, 2013, the same day the Mario Soares Foundation organized a debate on "Europe and the Euro" between Ferreira do Amaral and young, up-and-coming Socialist Party parliamentarian Joao Galamba. Ferreira do Amaral insists in his interviews that the only choice before Portugal is how, not if, it will leave the euro. He argues that a controlled exit from the euro, preferrably done jointly with Spain and Greece, must be negotiated with the European Commission and the Central Bank, with a six-month period to reintroduce the escudo. What he is proposing is unworkable and not in the real world, as it presupposes the continuation of the current financial system and euro, with Portugal paying off its euro debts by becoming some kind of "European tiger" able to export cheap industrial goods because of a devalued currency to a world economy which has disintegrated. However, Ferreira do Amaral’s accurate insistence that Portugal will blow up politically, die demographically, and be forced into default and leaving the euro, if no negotiated exit is achieved, performs a useful service to his country at this time. His book has garnered media attention in Spain, also. The euro has destroyed Portugal’s productive structure, he told Spain’s El País on April 23. Industry today does not make up more than 13% of Portugal’s GNP, whereas it made up 25% in the mid-1990s. The austerity programs are senseless. "I like to compare the current situation to that of the Marshall Plan," he told El País. What would have happened if the United States had demanded Europe have a balanced budget and austerity in return for its aid after the war? |