In 1983, Teodora Cardoso, was in the Bank of Portugal and it was up to him the mission of leading the mission which the Portuguese side drew the aid programme negotiated with the International Monetary Fund (IMF). In that capacity, the now president of the Council of Public Finances maintained contact with the then minister of Finance, Ernâni Lopes (1942-2010), and with the secretary of State for Budget, Alípio Days.
in Those difficult years of bankruptcy to the door, rampant unemployment and contestation of the social on the street, Teodora Cardoso have not encountered a single time with the prime minister of then, Mário Soares, to discuss the adjustment policies.
“Not if he went about it. It was a question for the economists to resolve,” says the Business Teodora Cardoso. “I realized that it was a matter of life or death, but on the things of the economy wanted results, and completely trusted in his minister of Finance,” he says, praising the courage of Mário Soares in advance in the height with measures little popular, which cost incidentally the Government, but are considered essential to stabilize the country, and ensure the return to the markets. It was at this time that Mário Soares gave a summary of the situation of the country that was to the story and earned him many hatreds pet. “The economic problems in Portugal are easy to explain and the only thing to do is tighten the belt” summed up the prime minister, in an interview with the Daily News, in May 1984.
While prime minister, Mário Soares made contacts with bankers like Ricardo Salgado and Jardim Gonçalves, so that they return to the country after the revolution of 25 April 1974, because, in his view, emphasizes Vítor Ramalho, “it was inevitable the opening of economic sectors to private initiative”. “The conception of economic” that Soares had the country done through “in the three D: to Democratize, to Decolonize, to Develop,” adds Vitor Ramalho. In their mental architecture, the rule was the policy. “He is a politician who is oblivious to the numbers and the economic reality, convinced that with the policy is that if you want to. And increasingly, the policy depends on the economy,” said Henrique Medina Carreira, who was Finance minister of the I Constitutional Government, led by Mário Soares, between 1976 and 1978, in an interview given to the Business, in October 2009.
Carlos Santos, in an article published on the site esquerda.net on 29 January 2011, traces the portrait of an agreement signed in 1983 between the Government of Mário Soares and the IMF. “The measures taken by the Government in agreement with the IMF were based on: the devaluation of the shield (12% in June over a devaluation sliding of 1% per month); the reduction of the rates on imports from 30% to 10% in OE to 84; drastic increase of prices of essential goods (including bread, vegetable oils, animal feed, milk, sugar, fertilisers and petroleum products, as stated in the letter of intent) and reduction of subsidies for these products; the freezing of public investments; descent of real wages in the public (“serving as an example for the wage negotiations in the private sector”, as pointed out by the letter of intent) and the freezing of admissions to workers; rise of taxes and the imposition of a special tax on income – a cut of 28% in the Christmas of 1983.
In 1984, in the revision of the agreement, the Portuguese Government has committed to further cuts in investment, reduction of real wages; price increases, notably electricity, public transport, water supply, petroleum products, oilseeds, sugar; the maintenance of the devaluation of the shield by 1% month-to-month. At the end of 84, the deficit of current transactions had fallen to 6%, but the measures agreed with the IMF have led, in 1984, to the fall of GDP, at 1.4%, a decrease in real wages by 10%; the inflation record of about 30% and the trigger from unemployment to around 10%.
For Mário Soares, the help of the IMF, was the accessory to get to the essential, the country’s entry in the EEC. And that is why in April 1984, in a statement published in the News Journal, underlines: “the one who sees, from abroad, this effort and the courage with which we are to apply the unpopular measures, it appreciates and commends the effort made by this Government.”
Portugal becomes a full member of the EEC on 12 June 1985. The then President of the Republic Ramalho Eanes) dissolve the Assembly of the Republic 15 days later, leading to the fall of the Government of Mário Soares. In October of that year, Anibal Cavaco Silva arrives to the prime minister, and in 1987 the PSD obtains an absolute majority, benefitting from the wave of economic growth that lives in the country, driven by the community funds.
But, still, Soares always put the primacy of politics above the economy, refusing to see the entry in the european community as a way to obtain financing for the country. “The reasons that led me to apply for the accession to the EEC – that many Portuguese at the time objected, but that parties majority in the Assembly of the Republic were not, contrary to what some still today think, essentially, economic. Were political and had to do with a great plan for Portugal: the consolidation of pluralistic democracy and civil society, releases a short time ago, the military authority; and also the recognition that the cycle imperial had ended with decolonization. The accession to the EEC appeared to us, as well as the counterpoint necessary to the integration of Portugal in the context of european unity, in order to participate, in full right, of its dynamism and progress,” said himself in a speech in 2005, in celebration of the 20th anniversary of the signing of the treaty of accession of Portugal to the then EEC.
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