By: Daniel Medlock
Produced & edited by: Holly Moody
She was disappointed when the Portuguese government ran out of money to re-hire her.
“English is no longer part of the curriculum for first through fourth graders, the state doesn’t have the money,” said Claudia Alexandre, an English teacher.
Alexandre got back up on her feet quickly and was able to continue her career teaching in the private sector. In addition to tutoring, she quickly found work as a translator for an export company. The real victims became the students, who are not only being denied early English teaching but are now being forced into bigger classrooms.
Thousands of teachers gather to protest layoffs in Libson. (via Wordpress)
“The maximum class size used to be 26, that is now the minimum. It is usually 30 even 40, ” she said. “The kids have never been so unruly.”
Teacher layoffs and classroom sizes are just a fraction of the difficulties Portugal has been facing as a result of their economic crisis. This period of economic stagnation has shown less economic growth than the United States of America displayed during its Great Depression.
Economic Decline before the Crisis
According to Joao Rodrigues, a professor in the Faculty of Economics at the University of Coimbra, Portugal’s economy had been in flux for at least a decade before the crisis occurred.
“Even before the crisis started in 2007, Portugal was already a country facing huge difficulties in adjusting to the strictures of the Eurozone. Before the crisis, Portugal was one of the countries in the world with the lowest GDP per Capita in the new millennium. Unemployment was already rising before the crisis,” he said.
The most obvious stricture of the Eurozone was changing the nation’s currency from the Portuguese escudo to the euro - a change the country did not have the infrastructure in place to make.
“It (the economic decline) has to be related to that (the introduction of the euro) of course, the current difficulties also have to do with the lack of awareness from the Eurozone. It was not prepared for the economic crisis,” said Dr. Alvaro Aguiar, an economics professor at the University of Porto.
“We thought that we were protected, that life would be easy. We didn’t adjust before the crisis, so we had to adjust abruptly during the crisis. Now we’re adjusting dramatically,” he added.
From 2005-2008, Aguiar served as an economic advisor to the Minister of State and Finance. From 2008-2011, he then served as the Chief Economist, a cabinet member of the Minister of State and Finance. He was a key voice in the decision to accept a 78 Billion-Euro bailout from European Financial Stability Facility, the European Financial Stability Mechanism and the International Monetary Fund – a group better known as the Troika.
“I was attending the Eurozone meetings at the time (October 2010) and we were discussing the bailout of Greece. I was already envisioning what was to come,” Aguiar said. “We looked at our budget for 2011 and the dynamics were quite clear, only some kind of common action from the Eurozone could make it work.”
Implications of Austerity Measures
|Thousands take part in austerity measures protests. (via Wordpress)|
These initial austerity measures included cutting the salaries of state workers who made at least 1,500 Euros a month by 3.5 and 10 percent and freezing their pensions. Mortgage rates on houses passed onto the highest paid tax measure, which at that time was 21 percent. Gas and electricity utilities also raised up from 6 percent to 23 percent.
The income tax is also rising. From 2011 to 2012, the tax rose from 9.8 to 11.8 percent and rose an additional two percent in 2013. However, there was less money to collect as Portugal’s unemployment rate fell to 17.5 percent – the highest in its nation’s history.
No group felt this more than young people, 42.5 percent of whom are unemployed.
The Impact of the Crisis
According to “The Guardian,” 250,000 young people have left the country to obtain work since the country accepted the bailout in 2011. To put that in perspective, that is equivalent to approximately 17.5 million people between the ages of 16-24 leaving the United States.
Pat Westerheimer, a Baltimore native and resident of Cascais, Portugal for the past 22 years, has experienced this phenomenon first hand through her foster son, Chico.
“He dropped out of school in tenth grade and got a job as a security guard making about 700 euros a month, and that was all he was ever going to make. When he was 23, he came to me and said, ‘I want to do more with my life,’” she said. “He went to Holland and he’s making 1400 (euros) a month. The lifestyle isn’t what he prefers - no sunshine and beaches or great Portuguese food - but economically that’s where he is and that’s where he will stay.”
On October 15, the government announced even more austerity measures. The news had economists like Aguiar wondering if all of these measures will eventually be worth it.
“Our external debt is being reduced, but its being done at the cost of the loss of our GDP. The question is whether or not we are getting healthy enough to increase GDP in the future and I hope so,” he said.