21 junho 2008

a new orthodoxy


By the mid-eighties a new, most effective, orthodoxy was superseding the socialist orthodoxy in Portugal - the European orthodoxy. Political parties in this mostly conservative country remained socialist, more in words than in deeds, but nobody cared anymore for socialism. Being devout Europeans was the distinctive mark of the Portuguese people now. A new pope was elected to represent the new orthodoxy - Mr. Cavaco Silva - replacing the pope of socialist orthodoxy - Mr. Mário Soares.

As with all orthodoxies there never was a rational discussion of the benefits and costs of joining the European Union even though it seemed clear from the beginning that several groups in society would be severely hit - such as farmers, fishermen and small entrepreneurs in traditional industries. With an enthusiasm that defies all imagination we supported all European institutions and policies and were willing to join them as fast as we could - such as the European Monetary Union - with no regard for long-term consequences.

We prouded ourselves of being the "good pupils" of Brussels and several polls at the time showed the Portuguese as being among the most enthusiastic supporters of the European Union. Obviously, this was more talk than fact. The truth, though, is that in a short period of ten years or so, from 1986 through the mid-nineties, the European orthodoxy operated a true miracle in the country.

The EU provided the external authority that this mostly Catholic people needs if it is to prosper. It stabilized political institutions and gave credibility to economic policies. Fiscal, monetary and exchange rate policies were dictated from Brussels and adopted in the country without questioning and without any protests. It would have been different had these policies been defined in Portugal by any Portuguese government.

The Portuguese went to school en masse, in part with the help of EU's money. They built bridges and highways at an impressive rate so that Portugal is likely to be today the country with the highest road density among EU countries. This was a period of high growth for the Portuguese economy - the highest of the new democratic era.

By the end of the nineties it was clear however that the benefits coming from the EU orthodoxy were losing steam. As we entered the new decade, economic growth fell drastically to the point of present stagnation. Many institutions in the country, some public some private, seem to be living on the verge of disintegration or at least severe crisis. The country is definitely in need of a new orthodoxy and a new pope. Where will they come from?

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