Statement by Vasco Cardoso, Member of the Political Commission of PCP’s Central Committee

The Covid-19 epidemic – The unavoidable response to the economic and social emergency

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1 – The situation that has emerged in Portugal as a result of the Covid – 19 outbreak requires as a first priority the adoption of prevention measures and propping up the National Health System’s ability to address the spread of the epidemic and to provide clinical responses to the crisis.

However, the consequences of the epidemic are not circumscribed to its public health dimension and require the adoption of measures to protect the wages and income of workers and the people and to safeguard, under the present circumstances, the economic activity and survival of thousands of micro-, small- and medium-sized enterprises that make up more that 90% of Portugal’s economic fabric.

The current situation requires such measures to be adopted urgently. However, those short-term measures have to be such that they will facilitate a sustainable recovery of the economy once the epidemic is over.

The measures are the more necessary as the economic situation is deteriorating rapidly because of the actions being adopted to prevent and fight the spread of the virus. A vigorous response is required, the more so because the country faces a context of dependency, shortcomings and inequalities that are the outcome of decades of policies that lead to the privatisation of strategic companies and economic sectors, disregarded national manufacturing, relinquished important means to safeguard the country’s sovereignty, crippled public services, significantly reduced public investment, encouraged low wages, pensions and benefits and kowtowed to the interests of big business and the stipulations of the Euro and European Union.

2 – Over the past few days, the Government has announced measures aimed at addressing the deteriorating economic and social situation. Without prejudice to other measures that may be adopted in the days to come, the set of measures disclosed so far is insufficient and inadequate to deal with the current national emergency.

As regard social measures, we take note of the decisions taken by the Government to extend welfare benefits – namely unemployment allowances –, or to prevent the termination of lease contracts that will expire during the current emergency, or to support the income of one of the parents whose children under the age of 12 are forced to stay at home (but only until the beginning of the school holidays).

However, the Government continues to ignore and has not opposed the massive wave of dismissals, the cuts in workers’ wages and remunerations and the forcible adoption of measures that represent an attack on workers’ rights. This was clearly demonstrated by its refusal (naturally seconded by PSD, CDS and the employers’ associations) to approve a range of proposals presented by PCP in the National Parliament. PCP reiterates that it is essential to put an end to dismissals immediately and to guarantee the payment in full of wages (and other income) to all workers.

It is also necessary to extend and strengthen all social allowances, including the establishment of exceptional support measures to address the current emergency; to eliminate any restrictions, whether to wages or entitlements, when it comes to supporting school-age children (and, in particular, to extend the age limit); to contemplate special support measures for parents with school-age children facing increasing hardship and needs (namely those with children in higher education); to ban evictions, whether of those renting their homes or of those defaulting on their mortgages, with the possibility for the latter of postponing their payments to the banks; to fight price speculation and to properly regulate the price of essential goods and services; to safeguard the supply of water, gas, electric power and telecommunication services; to reduce and eliminate charges on bank services that are essential for communities.
In economic terms, the Government has announced that the Social Security payments and tax obligations of businesses would be re-scheduled, lending facilities would be made available for some economic sectors (with grace periods and interest rebates) and EU funds would be mobilized to assist the hardest hit industries. The measures announced fail to address, to a large extent, the needs of micro-, small- and medium-sized businesses.

Those measures are inadequate to address a situation that is evolving and deteriorating rapidly: thousands of companies are at a standstill, making no sales but being subject to a range of obligations; the internal market is foundering and the external markets are contracting rapidly; payment chains are being disrupted and the situation can worsen in the near future; the supply of intermediate goods is in disarray and this affects industries that are important for the national economy such as textiles, clothing and footwear; the banking sector, largely foreign-owned, remains unresponsive to businesses’ needs; the current crisis is being exploited, mainly by large economic and financial concerns.

Besides safeguarding people’s jobs, wages and income, measures that can provide a strong support and economic stimulus and address the existing difficulties in the sort-term are urgently required. It is important to ensure that the country’s economy remains in operation as regularly as possible considering the context of the measures adopted.

This requires: safeguarding adequate health and safety conditions in workplaces and providing appropriate protection for workers; specific measures aimed at promoting food production, in particular for the farming sector and the fishing industry, as well as at distributing goods to communities, including outside the big retail chains; specific measures to support the speedy manufacturing and purchase of medicines and medical supplies, with a special emphasis on the role of the National Medicines Laboratory (currently the Military Laboratory); maintaining all public investments currently under way, large as well as small public works, preventing their stoppage; early payment of debts of public bodies to suppliers and the granting of support by the State to businesses by means of contracts aimed at safeguarding national supply chains – with the focus being placed on micro-, small- and medium-sized businesses; keeping public transportation services operational to address the needs of workers to move around; reallocating EU funds to support the sectors that will be hardest hit by the economic downturn; cutting the price of fuel (making use of the drop in the price of oil in international markets), as well as the price of electric power and regulating these markets adequately.

In a context where the vast majority of the economic sectors is affected by the fallout of the epidemic, PCP stresses the need for decisive measures that can offset the inevitable loss of income in sectors that rely on the services they provide to the general public, as is the case of restaurants and accommodation; cultural activities and entertainment; local shops and those selling in open-air markets, taxis and other micro- and small companies operating in the transport sector; barbers, hairdressers, gyms, among others.

3 – The current situation in certain strategic sectors and companies for the country requires authorities to take an uncompromising stand in support of the national interest and this will entail, as is becoming apparent, regaining public control and placing under public management those strategic companies and sectors.

4 – As is well-known, the country does not possess unlimited resources. But the key issue is that, whether in times of economic growth, or under exceptional circumstances such as the ones we are going through, those resources must be deployed to serve the country and its people and not, as has happened it the past, the interests of big business. That requires, among other measures:

- To reject the constraints imposed by our membership of the Eurozone and the European Union, namely as regards the budget deficit and the servicing of a debt that is incompatible with the economic and social responses that are required to address the country’s needs.

- To reassess the existing public-private partnerships (PPPs), representing a amount of about two billion euros of public resources that are annually handed over to big businesses.
- To reject the Government’s decision to use Social Security resources to fund employers’ obligations, as is currently happening. Thus, specific funding facilities for micro-, small- and medium-sized entreprises must be based on the State Budget and EU funds and be properly contractualised and monitored.

- To halt all transfers of public funds to support private banks, as is the case with Novo Banco, or the granting of any tax reliefs, as such resources are vital to address the national emergency and should not, as is currently planned, support large economic concerns, including for rentier and speculative activities.

5 – During the forthcoming weeks and months, a decisive battle will be fought against the epidemic. The current situation has revealed, not only the country’s shortcomings that are the product of decades of right-wing policies, but also that no adequate solution can be found to the present crisis with an approach that abides by the rationale of capitalist accummulation. Alternative policies are required now and in the future. Patriotic and left-wing policies that can halt the deteriorating situation and open up new perspectives for the development of the country and its future.

PCP will continue to monitor and to act on a situation that has new and exceedingly complex features but that must not be taken for an inevitability. And that, most importantly, must not be used as an excuse to once again degrade the living conditions of workers, pensioners, micro-, small- and medium-sized entrepreneurs or to launch in the medium-term a new onslaught on rights and wages with the argument that it is part of the necessary response to the crisis. As happened not so long ago with the Troika’ Pact of Aggression, and alongside PS’s political options, PSD, CDS, Chega and Iniciativa Liberal are already making suggestions that go precisely in that direction.

In a context where the country’s most reactionary pressure groups will use the current situation to advance their own goals, PCP reiterates that the country has the means and resources to prevent its economy from collapsing and to avert an unprecedented deterioration of our people’s living conditions. It is with that in mind that we will continue our fight.

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