Over 120 activists from all ten local authority areas, attended Saturday’s Greater Manchester Against Cuts Conference at the Friends Meeting House in Manchester. 
The mood of the Conference, described rightly elsewhere as ‘angry and feisty’, made a number of important decisions.

The Conference Organisers, Greater Manchester Association of Trades Councils, believe these decisions will help to begin the process of bringing together and building up across the Greater Manchester area, the broad ’solidarity alliance of unions and communities’ called for by the 2010 TUC, which is so urgently needed to defend our public services, jobs and the welfare state.

CONFERENCE STATEMENT

The Conference agreed the following statement:

“This conference declares its opposition to the government’s attack on the welfare state which threaten 1.3 million jobs and the health, education, housing, pensions and welfare provisions that have been fought for by working people for generations. 
It endorses the call by the 2010 TUC for a ‘Broad solidarity alliance of Trades Unions and communities” to oppose these attacks, which are based on a false ‘free market’ ideology, and to fight for an alternative strategy based on tax justice and making the Bankers, big corporations and the mega rich pay for the crisis that their system has created.

We commit ourselves to work in all sectors of our respective communities to:
Support the building, better organisation and co-ordination of all campaigns & initiatives against the cuts and privatisation, at a workplace, community, local authority, Greater Manchester, national and international level.

Oppose any attempt to use racism and Islamophobia to divide opposition to the cuts.
Mobilise the largest possible number of people to attend the TUC demonstration on Saturday 26 March.

Support and build the re-convening of this Conference in May 2011 soon after the local elections. (The 21st May currently looks favourite).
Help find practical ways to assist local groups and voluntary sector organisations to maintain services and jobs to support the communities they are needed in.

Act in the spirit of this statement until the Conference re-convenes.”
SECTOR TASK GROUPS

Equally importantly, the Conference agreed to establish a number of ‘Task Groups’ which will take the lead for bringing together, as far as possible, everyone within their sector across the Greater Manchester conurbation as part of the wider anti-cuts fight. Also, to promote the better co-ordination and integration of their sector, and input into, the broader anti-cuts fight.

These task groups will focus on building up the fight amongst young people (i.e. HE, FE & School Students, Young Workers & Unemployed Youth, all of whom were represented in the initial Conference workshop) the Trades Unions; Communities; Pensioners & supportive political parties, groups, campaigns and associations.
It is proposed that these task groups work alongside not only GMATUCs at a Greater Manchester level, but with each of the area’s Trade Councils, so as to promote mutual assistance and support for each other at a local authority level too.

This approach will help to bridge any sector “gaps” in the geographical map, e.g. allow Wigan, for example, which has a relatively small ethnic minority community, to call on and ‘borrow’ resources from that sector elsewhere in Greater Manchester.
This would make it easier to hold meetings anywhere aimed at the broadest cross section of the public but which might normally be handicapped by a lack of someone from the relevant sector, including supportive political parties, groups, etc.
This approach to building the wider anti-cuts fight across the Greater Manchester area, it’s believed, will help to foster the widest possible inclusion, participation and sense of ownership of the campaign by everyone who wants to fight the cuts at every level and across every section of our various communities.

Such a structure it’s also believed, will also provide the best mechanism as the fight goes on, for everyone to be able take part in the discussion on the way forwards. 
In particular, to have their say in the development of a commonly supported alternative social, economic and political strategy to that being pursued by the current Government which starts from the needs and interests of the overwhelming majority of ordinary people, rather than of the Bankers, big corporations, and the most well off. 
——————

The question of how local Councillors who say they are against the cuts should respond to the Coalition Government’s imposed funding cuts to local authorities clearly remains a major controversial issue.

The so-called ‘Dented Shield’ approach previously employed by Labour controlled Councils back in the 1980’s against the Thatcher Government, combined with a complete lack of involvement by Labour & other opposition party Councillors in the anti-cuts fight on the ground, is clearly a wholly insufficient anti-cuts strategy if one at all, and falls way short of the type of anti-cuts stance we should expect all elected representatives worthy of their salt to be taking in the next period.

What is urgently required from them is a policy of active resistance to the cuts at all levels, and for them to be assisting us in the building up of a mass movement of the people to break this un-mandated Coalition Government at the earliest opportunity, as this ultimately, is the only way we can stop any and all of the Government’s planned cutbacks from actually happening.

If our elected representatives aren’t prepared to do that, and instead continue to confine their opposition to the cuts simply to mere words rather than deeds, and a policy of basically ‘reluctantly’ endorsing so-called less harmful cuts year on year until the next planned General Election 2015, or until the current Coalition Government somehow miraculously implodes of its own accord before then, then it is surely only matter of time before they will lose whatever credibility they might currently have as representatives of ordinary working class people.
It will also be only a matter of time before they will inevitably swept aside by the growing solidarity alliance of unions and communities, those of us who are serious about stopping the cuts, and about bringing to power a pro-majority of the people alternative to the current Coalition SHOULD ALL IN THE MEANTIME BE COLLECTIVELY BUILDING!

Concerning the latter, the petty ‘Life of Brian’ style sectarianism, ultra-Left posturing, rivalry and jockeying for position of various ‘Left’ groups and so-called national anti-cuts campaigns needs also to come to and end, as it is thoroughly debilitating and massively frustrates the building up of the broader anti-cuts fight and the needs of the movement as a whole, which requires the maximum unity of action on the part of all those opposed to what the Government is doing. What all these sectarian groupings fail to recognise, despite their protestations to the contrary, is that there is far less that divides them than what divides the mass of ordinary people from this Government of the Banks, big business and the mega rich.

Their continued failure to recognise this, and the stubborn persistence of the most class conscious Socialists, trades unionists and community activists to build up and unify the movement in spite of their sectarian antics, will surely see them also swept away by the growing mass movement.

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Bob Whitehead wrote this for the site of Birmingham Socialist Resistance.

How do we stop the cuts? There is no realistic answer outside of huge mobilisations that unite service providers and users. The recent uprising of the students needs to be copied and multiplied by the unions, communities and working people in general. We could take a leaf out of the Tunisian people’s book. Without events that dwarf the TUC demonstration in March, important as it is, the ConDem government and the ConDem coalition that runs Birmingham City Council will not take much notice.

However, there is another side to the story and that concerns action at the local political level.

At present, out of 120 Birmingham Councillors, the Tories have 45, Labour 41, LibDems 31 and Respect 3. That gives the local ConDem coalition 76 seats, against 44 for Labour and Respect combined; a majority of 32. It represents a comfortable majority for their budget slashing proposals when it comes to a vote on Tuesday March 1st.

On that fateful day, Respect will presumably vote against the budget, as they did against the big cuts earlier last year. There is an indication that Labour will present its own budget, and therefore vote against as well, unlike last year when they abstained. Let us hope that this small step forward takes place. But even if it did, it would still need 16 LibDem Councillors out of 31 to vote against the budget to halt it in its tracks. This is hardly likely, but even a small rebellion would be of importance.

The Lib Dems are in an uncomfortable position. They gained many seats, including inner ring areas at the time of the Iraq war, out of voters’ disgust with Labour’s warmongering and the stampede to the right under Blair. But since then they have supported the invasion of Afghanistan and are complicit with the full scale attack on the welfare state being launched with the Tories. This attack will have a disproportionate attack on poor and inner ring areas. They should be called to account and pressurised to vote against, or at the very least abstain, on this draconian budget. After all, some of their seats might be in danger, and that is what comes first in their minds.

Then there is the question of the Tory majority of only 4 seats over Labour. Who knows what will happen in the May elections? It could be that the Tories soft pedal in seats where the LibDems might lose in order to maintain the status quo. But it is not inconceivable that Labour could scrape a small majority. If that were to happen it would explode the rationale for the LibDem coalition with the Tories. Clegg justified his decision to go in with the Tories by saying that the largest party has a right to take power. If Labour won a majority in May, the LibDems would logically have to swap their current coalition partner for Labour. This is not to say that they would of course, it is just to apply Clegg’s argument at the local level.

This gives the LibDems a further reason to look over their shoulder. Which way is the wind blowing and how can they run (or crawl) with it?
As for Labour, if they present their own budget, it is not going to be a needs-based budget. We only have to look at their national commitment to halve the capitalist deficit within four years. Yet, it could be slightly less bad than the one the local coalition is cooking up.

If they were really intent on taking power in May, they would announce their intention to roll back at least some of the cuts if the budget goes through in March. Even a muted clarion call would put them in a stronger position for electoral gains.

Labour Party members and Councillors are welcome to come along to Birmingham against the Cuts and get involved in its activities, but they must be clear that this body is based on a no-cuts position and that does not allow voting for a slightly less drastic budget than the coalition. If Councillors want to defend the communities that they represent, they should also wage a fight within the Labour Party for a needs-based budget to present as an alternative in March. This may be as fanciful as sufficient Lib Dem Councillors rebelling in order to block the budget, but it is the only principled course of action. Presumably however, something like that will be adopted by the three Respect Councillors; voting against both budgets and arguing for a needs-based alternative

The battle against fees and cuts is far from over. In fact it has just begun. Last term’s demonstrations divided the Lib Dems and shook the Coalition Government. Yet the cuts have hardly started. The students’ movement itself is only just off the ground. There are more than 2 million students in Britain. Another 1.7 million attend FE colleges. Most colleges have just only started to organise.

A second, greater wave of occupations and demonstrations could bring the education system grinding to a halt. This would have the backing of staff and free them to join the struggle. It is their jobs that are under threat. The vote in parliament was just the start. Universities must decide in the next few months what fees they want to charge. Then there are the looming cuts in staff and facilities that will be an inevitable consequence of the funding cuts. Occupations will be central to these new struggles: They can stop universities functioning.

This statement on the revolutionary situation in Tunisia is from Al Mounadil-a, an Arabic-language website of the Fourth International, published by the Moroccan section.

After 23 years of tyranny, robbery and oppression, the dictator Ben Ali has been forced to flee Tunisia.

Since 1987, Ben Ali and his corrupt supporters, the families of his wife and his relatives, the Trabelsis and Materis have relied on a huge apparatus of repression to prop up a regime characterised by systematic plundering of the economy leading to humiliation and starvation of the people. He controlled a police force of 150,000. This equals one policeman for every 27 citizens.

The regime was a loyal client of French imperialism and the global financial institutions which cynically condoned the dictatorship of Ben Ali for the sake of their share in the so called “Tunisian Miracle” which made the country the Hong Kong of North Africa. Now the regime’s erstwhile backers have had a rude awakening by a true miracle, an explosion of popular anger from the victims of Ben Ali and the neoliberal policies of the World Bank.

The current revolt was sparked in Sidi Bouzid, a month ago, when the young Mohamed El-Bouazizi set fire to himself as a protest against unemployment and indignity. This fire turned into a popular flame which spread across Tunisia and rocked it to its foundations.

From one demonstration to another, from barricade to barricade and martyr to martyr; the uprising flourished and grew as it resolutely made its way towards the palaces of the Carthage torturer, demanding the head of the old dragon.

The old tyrant fled in panic - marking a great victory not just for the people of Tunisia but for all the oppressed and exploited peoples of the Maghreb, the Arab world region and countless millions across the globe. This is living proof of the indomitable will of the people and the possibility of revolution to bring down reactionary regimes across the Arab world.

The Tunisian revolution has made a huge step forward, but its fate is not yet decided. There are still enemies of the revolution to uproot and sweep aside. The remnants of the old regime have not yet been decisively defeated and the dragon of the counter-revolution could still rear its head.

The old state machine is tottering but still has control of the police force and other means of repression.

Therefore, the revolution will not succeed in achieving the hopes of the Tunisian people unless the old regime is smashed and replaced by a new government representing the revolutionary people. We need a government of the workers, poor peasants and popular masses overseeing the election of a constituent assembly to create a new constitution.

The revolutionary people cannot simply wait for an interim government to form. We must seek to form workers’ councils and people’s assemblies in factories, neighbourhoods and schools and also in the barracks to win sections of the army to the side of the revolution. Such councils should be convened at the local and national level and be based on directly elected delegates subject to immediate recall. The councils must be a revolutionary power to run the country and also to defend the gains of the revolution. They must oversee the arming of the people as a guarantee against both internal counter-revolution and the possibility of foreign intervention.

We cannot trust the former allies of Ben Ali who still remain. Beware the liberal politicians who now seek to ride to power on the coat-tails of the people’s victory! “All power to the revolutionary people!” is the slogan that should unite Tunisian revolutionaries.

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“ If, one day, a people desires to live, then fate will answer their call.” Abul-Qasim Al-Shabi

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Get your copy of our student bulletin here. (Apologies that the link earlier was broken. It’s now fixed.)

From a restricted and desperately poor field of candidates, Labour chose Ed Miliband as its leader last autumn: then he (and Labour) more or less disappeared.

Why? Because for all the efforts of a largely hostile media to portray him as some kind of left alternative to his brother and Gordon Brown, even (ludicrously) a tool of the trade unions, Labour’s Mr Ed is following the policy of the famous and more popular talking horse of the 1960s TV series: “Mr Ed will never speak unless he has something to say”.

Miliband is silent because the party’s leadership is still rotten to the core with the politics of Blair, Brown and New Labour. It accepts the grim logic of capitalism, largely accepts the ConDem government’s case for cuts, and has only sought to haggle over the pace and scale of some of the cuts.

Despite the resistance, so far led by the students, to the implementation of policies outlined by Labour and its appointees, Mr Ed has chosen to resist not the government, but calls for him to speak to rallies of students fighting a massive increase in fees, and almost every opportunity to build Labour’s support by simply opposing what the ConDems have been doing.

Instead the entire Labour leadership has adopted the tactic of saying nothing – and watching Labour imperceptibly take the lead in opinion polls as anger centres on the Tories and their pathetic LibDem hod-carriers.

They have now convinced themselves that Labour is a shoo-in at the next election, after Cameron’s Thatcherite policies have antagonised voters, laid waste public services and privatised any remaining profitable sectors.

And they seem to be already looking ahead to their own likely policies when they step back into office, with many of their own more extreme Blairite policies having been implemented by the Tory-led coalition.

While Cameron in opposition shamelessly lied, promising to stop hospital closures and protect the NHS, Labour’s leadership is trying to avoid taking a stand that might soon prove an embarrassment if they regain power and continue once again – with the same lines of policy as before.

They are determined not to change policy, now or later. They no longer hold any “old Labour” values or principles of commitment to the welfare state and public services. They support free markets and private provision just as much as Cameron-Clegg.

That’s why they will not join the popular opposition to devastating cuts in local government, health, higher education and elsewhere.

This passive stance is shared by the most bankrupt and servile layers of the trade union bureaucracy, for whom the affiliation to the Labour Party has become not so much a lever to shape Labour policy as a tool through which New Labour has neutered the unions.

Why else would public sector unions like UNISON be so inactive in opposing massive job cuts, so reluctant to mobilise their members or even alert them to the dangers of the coming NHS Bill and other ConDem measures? Why did they decide in the autumn to wait until March 26 for even a protest demonstration, after many of the cuts have been finalised and decisions taken?

Of course Mr Ed’s passive, cynical stance is not shared by all Labour Party members: that’s why it is vital that local campaigns fighting cuts and privatisation should welcome any Labour activists who wish to break ranks and join the resistance. Once they join in common action they will soon learn the extent to which their own party has paved the way for many of Cameron’s worst policies.

A genuinely broad and inclusive movement is also vital if the ConDem offensive is to be stopped and defeated, and to ensure that Mr Ed’s line of passive gesture politics is discredited and supplanted by politics of mass struggle for a genuinely progressive alternative.

James Haywood, communication and campaigns officer at Goldsmiths’ College spoke to Socialist Resistance about the student mobilisations.

SR: Coming from Goldsmiths’ radical student movement, was the wide extent of the student struggle a surprise to you?

JH: I have to admit that when we waited at the Goldsmiths’ meeting point on the 10th November I was genuinely shocked at how big it was. I think what I was most surprised about was the strong Further Education (FE) delegations on that march, and how radical they were. I think that is what has marked this struggle so far, the 15-18 year olds who have everything to lose in these policies. They are inspiringly radical!
SR: You must have seen something in the wave of radical election victories?

JH: The election victories were good, but it’s one thing for someone to vote for a radical in an student union election, quite another for them to come out and occupy buildings and battle with police. The student unions have given us a good base of resources to help build this momentum, where we have radicals elected, so just goes to show how important union elections can be.
SR: Why do you think the Tories focussed on the students?

JH: I think they genuinely thought they would pass this through with nothing but some National Union of Students (NUS)-style lobbying and a few question time debates. It shows the arrogance of the rich yet again!
SR: Have they bitten off more than they can chew?

JH: I think they have gained a “victory” over students but at a huge political cost. Time will tell how Millbank etc affects the movement at large, but it looks like the student movement has reignited a flame in the UK public.
SR: The National Campaign Against Fees & Cuts (NCAFC) and other rank and file groups have developed a massive profile. What’s the role of NUS been?

JH: Well it was the NUS demo which was the launch pad for this movement, so we do need to give them credit for organising the demo. But that is where compliments end.

From emails sent to student union officers, NUS president Aaron Porter seems to want to focus all our energy on lobbying MPs, even after the Lib Dem scandal! They are terrified of unleashing a movement which they can’t control, because it will do radical things that they don’t agree with.

I have to admit that after Aaron came out in support of occupations at UCL, I had some optimism that the NUS was coming on board. But that has proved false. Career before principles!
SR: Is there a need for something in between, like a movement of radical student unions?

JH: We do need a network of radical Student Unions but we still don’t have the weight yet to form our own national union. I think if people are serious about the idea, we need to throw our weight into getting anti-cuts people elected in the spring, and re-assess our weight once the votes are in.
SR: What can British students ;earn from the struggles abroad?

JH: Well quite simply that radicalism works, and wins. If people genuinely want to stop the cuts and fees, we need to look at places where the campaign has won. France is the most obvious example. Those who dismiss this are not serious about the fight; and only want a symbolic campaign at best.
SR: What will happen next? How important is the campaign against Aaron Porter?

JH: I think the campaign against Aaron is fine, but if we really want a radical change we need to get people to the NUS conference, and, more importantly in my opinion, we need to get activists elected to local students unions. The SU hacks are the base of the right in NUS, if we reclaim our SUs we will be in a strong position to reclaim our NUS too.
SR: There’s a movement building to elect Clare Solomon as NUS President. Her victory would be great. What role does the NUS conference play in the struggle next year?

JH: It would be great to get Clare elected, however NUS conference has seen more and more inroads to democracy and it will be a monumental task. Let’s be clear, NUS conference is not representative of the grassroots. Your average activist does not naturally gravitate to NUS anymore, it’s your careerist types who do. That can and should be reversed, but I think we need one step at a time.
SR: What will success look like for the student movement in three months? In six months?

JH: The real success will be turning our occupations into disruptive instruments. We need occupations to stop universities from working, not just symbolically ‘liberated’ spaces. If we begin to stop universities from operating, then we have the kind of leverage that can genuinely win this fight.

Sean Thompson reflects on his time in the 1968 student movement and explains how today’s is different.

In the hazy golden glow of hindsight, Wordsworth seemed to have been writing about us in the spring of 1968; ‘Bliss was it in that dawn to be alive, But to be young was very heaven!’ The Tet offensive seemed to be a decisive turning point in the Vietnam war (a prediction which turned out, unusually for the left, to be correct). The Vietnam Solidarity Campaign had organised a demonstration of over 20,000 people the previous October and the next, in March, had been over 100,000 strong and even more militant. In May, as I drove through Finsbury Park with the first bundles of the first edition of the Black Dwarf, I listened on the car radio to the sound of the Internationale being sung on the streets of Paris by a huge demonstration of workers and students. Bliss indeed.

There had been a few sit-ins, such as at LSE in protest at the appointment of Walter Adams as Vice Chancellor, the previous year. However, in response to the May Events, a rash of student protests and occupations started to sweep the country - and, indeed, Europe. For a few weeks, students in Bristol, UEA, Sussex, Keele, Hornsey, Guildford, Corsham and at the time, it seemed, almost everywhere else, occupied their colleges - and in many cases won significant reforms from the authorities. Then they all went on holiday.

There was a was a lot of nonsense talked about ‘The Student Revolution’ at that time, with silly theories - such as universities becoming ‘Red Bases’ and whatever it was that Marcuse was going on about - gaining a temporary currency. However, while not wanting to overstate the significance of the specific events we have witnessed over the past month or two, I think that the current wave of student unrest is different from - and more significant than - the events in those dear dead days of May and June 1968 in three potentially vital ways.

First of all, while the student protests of 1968 were political, they were political in somewhat abstract ways; opposition to the war in Vietnam or to Apartheid, or even to the universities‘ involvement with corporate and/or state interests. Even the protests about the content and form of teaching in the art schools tended to reflect the concerns of an advanced, fairly politicised, minority. On the other hand, the protests we have been seeing over this winter have been largely the expression of students’ outrage at the attacks on their living standards and educational prospects - in other words, they have been rooted in the real life experience and aspirations of ordinary students.

Second, the student protests of ’68 were overwhelmingly middle class in their makeup; not suprising, since even though HE had expanded in the ‘60s and become an option for more working class kids, they were still a very small minority in a sector that was much smaller than it is today. Today, the HE sector has vastly expanded and far more working class youngsters attend university, or aspire to it. In addition, FE colleges have become an alternative to sixth forms for many working class kids and preparing them for university entrance has become a central role for FE. For these youngsters, the Education Maintenance Award scheme (EMA) is a vital support and the Government’s plans for its abolition from April has been seen by many of them (rightly) as a vindictive and mean minded attack on their living standards and their plans for the future. Thus, a feature of the street demonstrations across Britain has been the involvement of many much younger working class students from FE colleges and sixth forms.

Third, in 1968 there was little or no popular support for the student protests, certainly not within the labour movement. However, this time the protests have not just involved a much wider layer of students than were ever involved in 1968, but reacting as they were to what were merely the most visible of the savage cuts in social provision that face us, the students have to some degree come to be seen by many trade union activists (many of whom, of course, have children who have been or will be affected by the cuts) as the first wave of real opposition to the Tories and their Lib Dem bag carriers. And while Len McCluskey’s public support for the students may be largely rhetorical, it is public support nonetheless.

While we should not have any illusions about what the spontaneous upsurge of student anger will achieve on its own, I think that we should see it as a inchoate harbinger of the mass opposition that is to come - that has to come if we are to defeat this dreadful government. This is not history repeating itself - it has the potential to be the beginning of something really new.

Raphie de Santos writes:

A full financial bailout of Portugal involving the European Central Bank (ECB) and the International Monetary Fund (IMF) looks set to happen in the first half of 2011. This will involve severe austerity conditions being imposed on the Portuguese people by the ECB and IMF.

The indications are clearly there as at the end of 2010 Fitch joined the two other credit rating agencies to downgrade Portugal’s debt to A+ which is just above junk status. They are concerned that the current account deficit running at 9% is unsustainable with the ruling Socialist party unable to impose the effective 4% budget cuts in 2011 that they outlined at the end of 2010.

This risk of this happening is seen in the dramatic increases in the price that Portugal must pay to borrow money on the financial markets – this has leapt form 1. 8% per year in November 2010 to 3.4% in December 2010. The ECB is effectively carrying out an indirect bailout as it is the only buyer of Portuguese government bonds when these are auctioned on the financial markets.

In the first half of 2011 Portugal must repay or renew $27 billion of debt and take out fresh loans of $12bn which in total is 17% of its economy (GDP). It will be unable to raise this on the financial market and the ECB will not be able to follow the current route of bond purchases as the sums are too large. These figures are likely to be worse as Fitch and many other economists estimate that the economy will go into recession in 2011 and shrink by 1% to 2% because of the already planned cuts and the weakness of the Portuguese economy. This will take the debt to GDP ratio to well over 90% in 2011, the third highest in the Eurozone.

A rescue package will be put together by the ECB and the IMF with them effectively controlling the economy, spending and austerity measures. These will be much more severe than those planned by Portugal’s’ Socialist ruling party. The IMF in their 2010 report on sovereign debt see Portugal’s public spending growing by no more than 0.5% over 20 years with the annual deficit being reduced to 6% by 2020 with 80% of the reduction happening by 2013. This can only be achieved by massive cuts in public services, wages and jobs with a corresponding rise in taxes.

Of course as we have seen in the case of Ireland and Greece this only further weakens an economy and drives the deficit wider and creates a larger debt problem which is answered by more cuts. It is a race to the bottom which will impoverish an already poor country.

While Portugal did not experience a property bubble like Spain and Ireland its banking sector has cross exposure to the other countrys’ banks in Europe which are involved in the current debt crisis: Ireland, Spain and Greece. Portuguese banks have $39 billion of exposure to the banks of these countries while the banks of these countries have $52 billion exposure to Portuguese banks. This will mean that Portuguese banks are likely to suffer losses in 2011 because of this exposure and require capital injections themselves. They are currently finding it as hard as the Portuguese government to raise money on the international financial markets. This will mean that they will need an ECB/IMF bailout similar to Ireland’s banks.

Portugal’s problems do not lie in its lack of competitiveness – a report by the World Economic Forum in 2005 ranked Portugal for competitiveness above Spain, Ireland, France and Hong Kong. Its membership of the Eurozone is the source of Portugal’s problems. Portugal joined the Euro at a very uncompetitive rate that reflected the strength of the German and French economies. Up until recently the Euro increased in value to most major currencies since its inauguration making weaker economies such as Portugal very uncompetitive.

Since joining the Euro Portugal has seen unemployment go from 5% to over 11% and its economic growth rates well below those of the Eurozone as whole. To compensate for the structural weakness of the Portuguese economy caused by the strength of the Euro, Portuguese governments increased its public sector and promoted personal debt to sustain demand in the private sector. As a consequence the current account deficit has been running at a near 10% for several years.

The private sector is dominated by the service industries which have been hit by the credit freeze from the banks and the deep recession in Spain who are Portugal’s largest trading partner. The agriculture and fisheries industries employ 13% of the workforce but make up only 4% of the GDP and contribute to a low wage economy – average wages in Portugal are Euro 804 a month with the minimum wage being Euro 475 a month.

The Portuguese people are not responsible for the crisis – it is the membership of the Eurozone and the politicians that took them into it who are to blame.

An alternative to austerity for the Portuguese people is:

· Default on the government debt to end the spiral of debt and cuts and debt;

· Withdraw from the Euro to improve the economy’s competiveness;

· A mutual cancellation of the debt and loans of the Portuguese banks and taking the banks under social ownership and control and socialising their loans;

· Raise the minimum wage to increase demand for basic goods and services to boost the economy;

· Energise the agriculture and fisheries industries through social ownership to boost food supplies internally and create a larger export market for them; and

· End political and corporate corruption which wastes billions of Euros a year.

These measures would start to transform the Portuguese economy and to put it under the control of the Portuguese people and build a society based on meeting need and not profit.