Teixeira dos Santos, former finance minister, went down in history for having precipitated the request for foreign aid in 2011 by publicly reporting the country’s true financial situation. In a book that will be released this month, he says that the prime minister cut ties with him, but was forced to recognize that Portugal was no longer able to resolve the threat of bankruptcy on its own. The coming of the troika was inevitable.
On November 11, 2010, the corruption inside the government machine was enormous. Fernando Teixeira dos Santos, then Minister of Finance, had been concerned for at least half a year with the country’s financial situation. It was a Council of Ministers day, and even so, Teixeira dos Santos was unable to speak to José Sócrates right after the meeting to explain that the request for external assistance was inevitable. He sent an SMS explaining that Ireland had already done so. “We will follow, fatal as fate.” In public, they both completely ruled out this scenario.
The conversations and proceedings, which go back to the period of the troika, are described in some detail in the book “Mudam-se tempo, se main- se Desafios”, by Fernando Teixeira dos Santos, whose public presentation will take place on the 19th , in Lisbon, and January 20, in Porto.
Teixeira dos Santos’ work goes far beyond conversations with the prime minister, analyzing the Portuguese economy over several decades. “With the turn of the century, the average annual growth rate decreases very significantly, coming to be below the average of the Eurozone countries, and also lower than in the past”, reads at one point. Interestingly, it was this type of argument that Rui Rio used against António Costa in last Thursday’s televised debate. Costa called the argument “naughty”.
Socrates never disarmed in the face of growing difficulties in obtaining financing in the public debt markets. In reality, Teixeira dos Santos maintained the same public position of de-dramatization, eventually out of loyalty to the prime minister. As an example, on January 11, 2011, in statements to TSF, Teixeira dos Santos did not “in any way” foresee the use of foreign aid, assuring that the country is “doing its job”, contrary to the European Union. As he reveals in the book, his concerns dated back to at least the beginning of 2010, having tried to bring Socrates back to reality from November of that year.
The country’s financial situation had worsened when the Stability and Growth Program (PEC IV) was rejected in the Assembly of the Republic on March 23, 2011. “In the following days and weeks, there were strong downward revisions to the rating of the Republic, banks and several large Portuguese companies, making it extremely difficult to finance our economy”, recalls the author.
The minister’s efforts proved to be fruitless, until April 6, 2011. “I argued that not proceeding with the request would be a huge irresponsibility on the part of the Government. It remained unyielding and we ended up having a disagreement”. At the end of the afternoon, Teixeira dos Santos publicly expressed his opinion, in an interview published online. “As soon as my statements became public, he called me clearly annoyed and cut ties with me”, says the author of the book. In the evening, Socrates would inform the country of his decision to ask for external help, something he had always denied until then. Publicly, Teixeira dos Santos also never admitted this scenario.