The term ‘Portuguese Brexit’ has been popping up in Portuguese media as of late. While this is a very unlikely scenario, I think that in the context of growing Euroscepticism and growing support for right-wing populist rhetoric in the EU, this merits some attention, especially given Portugal’s generally favourable attitude towards the EU.
The idea of a Portuguese Brexit was voiced by Catarina Martins, Chairperson of the left-wing Bloco de Esquerda party in Portugal, who is campaigning for a referendum to be held on Portugal’s membership of the EU. This situation arose in response to the possibility of sanctions being applied to Portugal and Spain for “lack of effective action” in dealing with levels of “excessive deficit”, which was discussed earlier this summer.
The decision to discuss the application of sanctions came after a meeting held by Ecofin, the EU’s economic and financial affairs council, as a result of Portugal and Spain’s failure to comply with rules stating that EU member state’s budget deficits should remain within 3% of GDP (gross domestic product). Had the commission decided to apply sanctions, these would consist of a fine that could go up to 0.2% of the country’s GDP, and would be the first case of sanctions being applied to a Eurozone country.
Feelings of outrage and injustice were sparked in Portugal and Spain as a result. In the case of Portugal, its deficit stood at 8.6% of GDP in 2010 and was reduced to just over 3% by 2015. This was the result of horrendous salary cuts and reforms which have characterized an economically precarious situation for Portuguese citizens in the past few years. António Costa, Portuguese prime-minister, argued that imposing sanctions on a country that is implementing demanding measures in order to reduce deficit is unjust and unreasonable, highlighting the unfavourable social and economic European context in which this situation took place. In a period of weak economic growth, perhaps asphyxiating that growth through sanctions is not the wisest move.
Furthermore, Portugal and Spain were by no means the first, nor the worst, member states to breach the 3% deficit rule. Fingers were pointed at France, with 11 violations, as well as Italy, and even Germany for surpassing this figure. The debate then turns to the EU’s (in)ability to challenge larger member states. As one Portuguese politician argues, it is inequality that is killing the EU. All this is not to say that the EU shouldn’t take its role of ‘refereeing’ countries that fail to keep within the established deficit seriously, but that discussions and punishments not be dished out arbitrarily, and not throw weaker member states under the bus.
In the end, the commission decided not to go forward with the application of sanctions against the two countries, recognizing the immense sacrifice that has been made by the Iberian people in order to improve their countries economic situation. Both member states are now tasked with coming up with measures to ensure the deficit will be within the 3% limit by 2017, a process which is currently being tackled in Portugal. The situation is a little more difficult across the border in Spain, in the midst of the political gridlock taking place there, due to the fact that the provisional government is not able to make any kind of binding budgetary proposals, thereby assigning this task a more challenging nature.
While sanctions were not applied, bitterness towards the EU for its supposed unfair treatment remains. Situations like these only serve to increase criticism of an EU that is far removed from the lives and interests of European citizens, and will do little to remedy the issue of the perceived democratic deficit in EU politics. Perhaps the commission would do well to pay less attention to the well payed economists of the Eurogroup and instead find a way of decreasing the space between the EU and the ordinary European, . Unless it does this the EU risks fuelling a domino-effect of campaigns for referenda on EU membership in the aftermath of Brexit, jeopardizing the entire European project in a period of great turbulence.
For more by Elisa Abrantes, click here
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