The new Portuguese government has politicians known for their good intentions, but may be not all with the needed experience to get results in the very short run. Portugal will face next year a deeper crisis than the EU.
1. The EU is delivering Ukraine with billions worth in arms. This is a good way for the US-UK-France-Germany arms-industry to sell more of modern units to their own, and all NATO- countries. This was not budgeted and the EU will push most member-states to raise the defense budget.
2. Although the ECB(European Central Bank) says it may cut interest rates, real inflation is not coming down. The way its statistics is collected is too general, not considering the different social groups. Inflation will continue to hit the middle/ lower classes which use Euro mainly for housing, food-stuff, and transportation.
3. Because of all efforts to lower the use of fossil fuels, their prices will raise, as OPEP will now allow corporation profits to fall. Also, products which depend on oil, as jet-fuel, plastics, fertilizers, will go on raising prices.
4. The two major wars on top of other conflicts and the climate-change will limit food-stuff available in most of the planet, which will push food-prices.
5. Tourism income will fall, as younger tourists tend to use AirBnb and spend less. Because of less net income in families of Portugal’s main clients, export of shoes, fashion and industrial molds will fall, unemployment will raise.
6. Most of major cartels, as banks, food-distribution, power-distribution, know that this crisis will be worse than the 2009 and have pushed for three decade’s largest profit. They are not parting most of it to their share-holders, but raising reserve-funds. Mortgage-loans are falling, as banks expect families having less net income, and new homes will not be sold.
7. Already now Portugal has some 400,000 idle homes to sell/rent. Some 50,000 will go back to the banks (5). ECB will push banks to sell them, even to a minor lost, to avoid a new wave of bankrupts. To avoid that, many EU-countries will give them loans or financial support.
8. Most of EU-countries will have to both raise taxes and take external private loans. As Portugal and a few other countries have already very high public debts, around 99 percent, instead of 60-70, the huge funds will listen to what rating agencies have been warning, and raise interest-rates for new loans.
9. Portugal has not budgeted another €9billion to those funds, neither another €5billion to more arms, neither €4billion to support banks from bankruptcy, neither some €1billion to promised raised wages for many public professions.
A known consultant may not be pessimist nor optimist, but realist.
Will the ministers use the competence of non-politicians to make needed structural changes in the laws to face the cartels? Will parliament approve them?
