“Der Spiegel” Article – English Version

Many thanks to Linda Domeisen, student in economics, for the fast and complete translation!

Portugal’s students are supervising reforms
Portugal’s crisis generation: How a 22 year old student is supervising his government
The government of Portugal wants to renew the country, but the reforms are controversial: While his parents suffer from pay cuts, economics student Francisco Cluny is supervising the progress of the reforms in politics – so that it will not ruin his own future.
Propositions of the Economics student Francisco Cluny Parreira Rodrigues, Universidade Nova, Lissabon, Juli 2012:
· Most of the people are not asking, how they can solve the crisis, but whose fault it is.
· No matter which strategy one chooses to solve the crisis – it will inevitably affect hundreds of thousands to a million of people painfully.
· The solution of the crisis is thus a question of deprivation. It is about abstaining now, in order to be better off in the future.
Shortly after Francisco started studying, the Investment Bank Lehman Brothers crashed in the US and the financial crisis began. Now, the wiry 22 year-old with dark curly hair, is writing his final thesis and his home country Portugal is bankrupt. Other countries have to support his government, so that they can continue paying rents and that the social system does not collapse.
There was probably no better time period to study Economics. And none worse. Much of the theories
cited in the textbooks were indeed happening in the last four years. Francisco was studying Economics having a live object or rather one struggling for survival. At the same time he is worried by anxiety about the future, since he has to find a job in this country devastated by crisis- and thereby he has to hope for the government.
With comprehensive reforms, Pedro Passos Coelho wants to get the country fit for global competition and reduce the public debt to a tolerable level. His cabinet is flexibilizing the labor market , is cutting the wages in the public service, caps social contributions and makes the legal system more business friendly.
Again and again the government is pointing out, that the reforms are effective. But is that really true?
Francisco has decided to examine the measures, from which his future is depending, himself.
Students are becoming guardians of the reforms
At University they call him Cluny, like George Clooney, after his second given name. Cluny kept spreading his ideas: Students as guardians of the reform, young economists serving the Troika. He found two dozen fellow students and they founded the Nova Economics Club. Most of the times, they met in a working room at University, between golden emblems and dark wood paneling. Through the window
they were watching over the city, across white buildings extending until the Tejo river. “Dead Economists Society” some of them called them, referring to the movie “Dead Poets Society”, in which a professor inspires his disciples to think freely and wakes their passion for poetry. Cluny’s Club also wants to waken passion – for the economy. He wants, that the Portuguese understand, what happens to their country. “Many condemn the reforms in general”, he says. “But they don’t even know what exactly the government undertakes.”
These young economists are now developing indicators, which should measure the successes and failures of the reforms. Guidelines, which should be comprehensible for everyone. They get support from their professors, among others from Paulo Leiria, an economist, who himself is part of the government task force, which coordinates the structural reforms.
In a first analysis, the Nova Economics Club, recognizes indeed some positive approach. Many of the announced reforms were implemented fast and consequently, the report says. Youth unemployment has hardly increased since fall 2011– the time, when the first reforms started – an there is hope, that it will eventually decline again. The healthcare sector is making progress, too. Through intensified use of cheap, unpatented drugs, costs are decreasing there.
The Portuguese justice system comes up short in the student’s judgment. For years, the courts cannot keep up with the handling of the processes. Lately there were roughly 1,5 million pending processes and companies are involved in many of them. They can hardly plan, which curbs investment. The government has embraced a series of measures to speed up the legal system. But, until now, it is not clear, whether they will have any effect, says a report of the Nova Economics Club.
On June 20, the young economists presented their results to the representatives of the IMF and the EU Commission. Among others, Albert Jaeger, the permanent representative of the IMF in Lisbon, was present. „I was impressed by the quality of the studies”, he said. He is sure, that the initiated reforms will have positive effects. The only question is, how fast. And whether the population backs them long enough.

How the reforms spark a generation conflict

If the reforms in Portugal are mainly a question of deprivations, the burden is unequally distributed. Francisco’s mother Helena is working as attorney. With the reform program, her salary has decreased by 30 per cent. Francisco’s father João works independently as event manager. The number of his clients falls as well as the number of his investors. Recently, the bank denied him the funding of a project, even though his has paid back every single credit in the 26 years of his professional career.
It is mainly the older generation, which loses out with the reforms. Their children however want to win. They hope that the structural transformation will bring the country, in which they would like to work soon, back on track. It is understandable that the generation of the parents, which contributed to building up the country after the Carnation Revolution, is complaining about the loss of their prosperity.
At the same time, the resistance of these large voting blocs is slowing down the reform process. A young economist, such as Cluny, which socializes with the ambassadors of the IMF, also has to keep facing those realities.
Lately, Francisco was sitting at dinner. His mother put plates and dishes on the table and outside the night was falling over Lisbon. And as so often recently, they were discussing the crisis. “For the most part it is right what the government is doing” Cluny lectured. “We have to raise productivity and flexibilize the labor market.”
„That might be right“, his mother said. “But the government has not shortened your salary, but mine.”


Link to the original article in German: http://www.spiegel.de/wirtschaft/soziales/portugals-studenten-ueberwachsen-reformen-a-843407.html#spRedirectedFrom=www


1 Comment

  1. I had just finished an English translation myself and was going to send it to you guys. Well, glad someone did the job better than me. Cheers.

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