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Economy

Portugal's pensioners take to the barricades

Austerity measures proposed by the Portuguese government would hit pensioners hard if they go into effect. But rather than setting off a generational conflict, they are uniting protesters against the cuts.

Every afternoon Angelica Canelo visits the cafe at the local senior center directly across from her home in the Lisbon suburb of Amadora. "I play dominoes here, or talk to some of my friends," she told DW. "But I don't eat here - I eat at home." By doing so, the 79-year-old retiree saves money on the more traditional coffee roundtables she has at home with friends. With the 400 euros ($518) transferred to her bank account each month by the state, Angelica has to stick to her budget in order to be sure that there's enough to cover rent, food and telephone and medical bills.

As to whether the Portuguese government's new austerity plans will affect her directly, Angelica doesn't know. But she'll adapt to any new cuts, she says. "I have to live from what they give me. And if there's not enough for meat or fish, then I'll just eat bread and soup.

Angelica Canelo:
Photo: DW/Tilo Wagner

Angelica Canelo watches every euro to make sure there's enough left at the end of the month

Prescription: austerity

Ever since April, when Portugal's highest court declared parts of the government's budget cuts unconstitutional, Portuguese legislators have been searching for new ways to reduce the public deficit. The so-called troika of the EU, IMF and ECB has been pushing in particular for pension cuts for former civil servants. Portugal is above the median in terms of the percentage of its GDP it hands out in the form of pension payments, with 3.5 million Portuguese citizens currently receiving such benefits.

But not all pension payments are equal. While half of former full-time public employees receive monthly retirement payments in excess of 1,000 euros, 85 percent of former private sector employees get less than 500 euros.

Portuguese Prime Minister Pedro Passos Coelho recently unveiled a new proposal that would hit private-sector pensioners just as hard as their publicly employed counterparts. The pension levy has been a bone of contention within the prime minister's center-right government. Whether the cuts will actually be made depends on whether Portugal can lower its deficit by 5 percent by the end of the year.

Protests swelling

The government's plans have met with major resistance. Six months ago, a group of pensioners came together and decided to protest against austerity measures. Vitor Ferreira, head of the Lisbon office of the country's National Association of Pensioners, told DW that thousands of uninsured elderly Portuguese have recently registered with his organization.

Vítor Ferreira 
Photo: DW/Tilo Wagner

Politicians shouldn't provoke a generational conflict, said Vítor Ferreira

"Naturally, we pensioners want to do our part in getting a grip on the debt crisis," he said. "But it bothers us that we're the ones who always have to pay the special levies - the pensioners are the only ones contributing."

Experts have said Ferreira's view is correct. The former Labor Minister Antonio Bagao Felix calculated that real income losses for pensioners in Portugal over the last two years amounted to between 9 percent and 25 percent. Ferreira's group has called for major reforms to the pension system. Instead of new levies placed equally on all pensioners, retirement benefits need to be evaluated on a case-by-case basis.

Ferreira accuses the government of using the current debate to provoke a generational conflict. At a youth conference for his conservative party, Coelho said that many pensioners in Portugal receive more money than they actually deserve. The fact that he attacked pensioners at a conference of young people was insensitive, Ferreira said.

"We are experiencing a dramatic economic situation and youth unemployment is shockingly high," he said. "A responsible politician cannot make a direct connection between these two issues and reform of the pension system, as the prime minister has done."

Relying on family

In Portugal, as well as other nations struck by the euro crisis, like Spain and Greece, families have become a critical support system for young people. Solidarity among the young unemployed and pensioned parents is one of the reasons Portugal has not seen an even higher increase in poverty as a result of the economic crisis. The Lisbon-based social group, Cais, estimated that the number of Portuguese threatened by poverty could increase from 24 to 35 percent without the support of friends and family.

Historian Tiago Peixoto, 34, said he lives with his mother in Lisbon, "We support each other as my mother is also suffering because of the crisis. Of course I would like to improve my own life, be independent and have my own apartment. But that's not in the cards now. That's why we live together."

Peixoto participates in a movement that promotes the rights of young Portuguese. But, he said, he and other young protesters also support pensioners' opposition. It's a sign that the government's austerity measures unite rather than divide us, he said.

DW.DE