Portugal here. It's pretty rad. We're gonna have a jump of like 30% in IRS taxes. Everyone's psyched.
Can you describe the situation more? Is Portugal just following everyone along and adopting austerity or is it doing anything different?
It's doing austerity full throtle. And it's killing us. Unemployment going through the roof (16%, an historical record) and the deficits not going down. Kinda hard to go down when the employed go down in numbers, when the market is free-falling.
Not much we can alternatively do though. We cannot do what we traditionally would have done in similar circumstances: devalue the local currency (which would empoverish everyone equally against the rest of the world, but would maintain employment and gain some productivity against other countries). We are stuck with an overvalued Euro, a situation that is being proven to be just as bad as being stuck with the Gold standard.
I can explain you the problem in a more developed manner. Rest assured, it's ghastly bad. The Euro experience proves the idea that you cannot have a common currency without a more shared tax policy (sharing bank bonds, sharing unemployment subsidies, and so on and so on). However, there is no political will to go an European Federation. So we are kinda stuck in an hesitation. And Greece is suffering pretty badly. Their best option would be to sever their usage of the Euro and return to the Drachma. Such a move would be disastrous in the first year or two however and so no politician is really going to porsue it.
So, unless the politicians start doing what they failed to do so far: have a vision and lead the events, rather than reacting to what should have been obvious disasters from the beggining, we will continuing the downward path we've been through so far.
