1. The measures now announced evade what is essential to combat speculation and rising prices and the inevitable increase in wages and pensions. And, above all, they ignore that the problems to which they say they want to respond are inseparable from the instigation of sanctions that are being imposed under the pretext of war, benefiting those who profit from them to the detriment of the interests of the workers and people.
2. The immediate response to the increase in the cost of living calls for measures to control and fix prices and increase wages and pensions. The measures announced by the government do not go in that direction, do not address the problems that are at the root of this situation and, therefore, they risk being ineffective and outdated in the short term. To make matters worse. This time, they invoke the fight against the inflationary spiral to avoid increasing wages and pensions, leaving the field open to the speculation that is at its origin.
3. The refusal of any measure to increase wages and pensions will mean a return to cuts, now not through a formal decision but through the real loss of purchasing power. By refusing to increase wages and pensions, the government imposes on workers, pensioners and the people in general, with the increase in inflation, the degradation of their living conditions. Many of the wage increases that took place, such as the increase in the National Minimum Wage that the government decided at the beginning of the year to place at €705, are already practically absorbed by inflation (6% increase - 5% inflation). In the case of pensions, the situation is even more serious with inflation already being between 5 and 20 times higher than the increase the pensions had in January (increases between 0.24% and 1%). The increase in wages and pensions thus becomes the most important and decisive measure to prevent the erosion of purchasing power and the accelerated impoverishment of millions of Portuguese.
4. As for the tax cut, this can have some positive effect. In fact, some of the measures that the government has now adopted, namely in relation to fuel taxes, were put forward by the PCP just last week. But these tax reduction measures must be accompanied by control of prices and price fixing measures. By choosing to reduce taxes without setting maximum prices (as in the case of fuel), the government allows economic groups to continue to raise prices in a speculative manner and leaves open the possibility for oil companies, large retail groups and other economic groups to continue to promote speculative price rises and subsidise their profits with tax revenues.
5. Regarding productive activity, more important than postponing deadlines for paying taxes or social security contributions, it is absolutely urgent for the government to intervene in order not only to stop the increase in the costs of production factors (namely energy) but also of the intermediation margins of large retailers. The example of what happens with agriculture and fishing is particularly significant: fishermen and farmers do not receive a fair value for their production and are paid in some cases below production costs, while consumers pay increasingly higher prices, namely for food. And this can only be explained by the fact that, in the meantime, the large retail economic groups accumulate fabulous profits - as we saw at the end of 2021 - resulting from the margins they obtain from these practices.
6. The unstoppable rise in prices associated with fabulous profits by large economic groups is not an inevitability. The instigation and use of the war and sanctions – in the wake of the use that some have made of the impacts of the epidemic – can only be fought with a reversal of policies that, instead of protecting the profits of large companies, protect the purchasing power of workers, pensioners and the activity of SMEs.
Inflation is, in some cases, a direct consequence of war and sanctions, but is, in many more situations, the result of their use as a pretext for speculative price increases.
It is necessary to prevent this pretext and also for the government to intervene for peace and not the aggravation and escalation of the war.
