April 29, 2012

Mary Fonseca’s “Letter from Lisbon” : portents of plague

Mary Fonseca’s “Letter from Lisbon” : portents of plague

A friend writes from Lisbon, … as those “Talk of the Town” pieces used to begin in the dear old New Yorker. The friend in this case is my ever-watchful sister Mary Lydon Fonseca, observing the worsening symptoms of the plague-like “crise” in Europe. Forty years ago Mary and her Brazilian husband, the journalist Wilton Fonseca, settled in Lisbon, where they raised their two kids and Mary has been teaching and writing ever since.

Unless you’ve been living in a closet somewhere you’ve heard of our Hard Times. Times are truly, truly hard for many people in Portugal, and they are getting harder as the austerity that follows the meltdown of the euro and the euro zone takes hold.

But they are also Interesting Times, as in the Chinese maxim. Change is accelerating, which seems to make us more alert. Little shocks sharpen our brains — or at least our powers of observation. We see signs and portents in daily life: little gold shops have sprung up like mushrooms and are eager to buy any gold we might have lying around the house – for cash! A new-fangled pawn-shop — one of a chain called “Cash Converters,” Australian apparently — has replaced the old charcutaria where we used to buy good cheeses. Several national holidays will be eliminated after negotiation with the Church which agreed to drop the Feast of the Assumption (August 15) and Corpus Christi (June) if the State would drop secular holidays like the Restoration of Sovereignty in 1640 after 60 years of Spanish domination (December 1) and the Declaration of the Republic (October 5). These are relics of the Old Portugal.

The government is selling off state assets like the national railroad and the national electric company, which will now be partially owned by the Chinese of the Three Gorges dam authority. Why are the Chinese interested, we wonder?

We watch TV for a hint of the next austerity measure and read the newspapers, Portuguese and British for interpretation. We are watching, wondering, talking, and not at all sure what to make of the big picture — let alone the future.

Analyses of how and why everything started to fall apart vary greatly, which is not surprising considering that a small amount of high finance is more than most people can deal with. In Portugal the most popular story is that the previous government borrowed too much and overspent on grandiose projects that we didn’t need, like 4-lane highways in the ‘provincia’ and the TGV (bullet train) to Madrid, to which huge amounts of money were committed but which is now suspended.

More recently, people who know a bit more about Europe as a whole have pointed out that before the crise hit, the Germans were only too eager to buy the bonds that countries of Southern Europe put on the market, thus showering us with the money we needed to import the Mercedes and BMWs they wanted us to enjoy. Besides, our banks were indulging in the sexy new financial operations they learned about from Wall Street and the City of London.

It is still puzzling that all these countries, starting with the PIIG’s (Portugal, Iceland, Ireland, Greece) crashed at the same time for quite disparate reasons. Mark Blyth, a Scottish economist at Brown, says that blaming sovereign debt lets everyone forget that this is primarily a worldwide crisis of the banks. Eric Toussaint, a French expert on Third World debt, agrees with him. But since everyone knows about the personalities of the nations involved, it’s natural to finger the spendthrift Latins and Greeks of southern Europe, together with the feckless Irish, as culprit.

Portugal is laid low and struggling, probably fruitlessly, to redeem its sins through austerity. Spain is sinking fast, and Italy and France have been downgraded. The Greeks have been circling the drain endlessly and may gurgle down any time now. Everything is taking a long, long, long, long time – or so it seems. Mark Blyth thinks that if Germany would take up the burden of being rich and become a “hegemon” it could bail everyone out, but how likely is this when it is entirely against the philosophy of the EU? The bail-out would be lovely, but could anyone stomach leadership by Germany, much as we sympathize with Angela?

Portugal is humbler and more circumspect than Greece. Long ago when the crisis began, people used to refer to the Greeks as “coitados” (“poor things!”) But the shouting crowds got tiresome. We have not been revolting in the streets and are still earnestly following the instructions of the technocrats who come to us from the “Troika,” the European Central Bank, the IMF and the European Union, and who have laid down the rules. The Troika chiefs, who are not very visible as individuals, come back every couple of months to check up on the government and supervise the fine-combing of bank ledgers by the scores of local accountants they hired. They seem to be mostly tall, sandy-haired number-crunchers who (it is said) stay at the Ritz across the street from our house but for breakfast prefer a greasy spoon nearby.

The goal now is to turn over every stone and scrape up every last centimo that could put us back on the right track. The Swedish chief has said salaries in Portugal are too high, a rather startling remark, because pay here has always been very low by the standards of the developed world. Alas, he is right in the sense that we don’t produce enough and have no cheerful prospects in the globalized world. Nothing much is going on here that promises a new dawn around the corner. Tourism is the biggest industry, and we may be fated to become “the Florida of Europe” since the climate is a huge asset (far nicer than Florida’s) and we have antiquity to boot. Newspaper columnists lament that we let the Spanish beat us out in the fishing industry and the Asians in manufacturing shoes and textiles. Farming is precarious and we import most of our food.

Meanwhile the government is raising fees of all sorts, such as the amount a citizen pays for being seen at a public hospital emergency room. On January 1st this fee went up from about $4 (which was clearly too low) to 20 Euros (about $27). A young ophthalmologist, who is my student, says that on the morning of the first day of the new price, the number of patients in the waiting room of the eye clinic was down to 8, from the usual 50 to 60. He thinks the missing 42 or so would have gone to a pharmacy and made a stab at getting an appropriate inexpensive med.

An economist friend tells us the public health system has been incredibly wasteful, and clearly it should have managed to incorporate some kind of means test, as was obvious when I had an operation to remove a malignant melanoma and realized the various charges had added up to about $6. Still, an American knows about the horrors of a wholly private system. And the high quality of Portuguese medicine has been proven over and over in international statistics, including the spectacular drop in infant mortality that was achieved in little more than 30 years since the Revolution of 1974.

As each painful new measure is introduced, our Prime Minister promises more. In his Christmas speech he said he was aware of the “indignation, despair, depression and anger” in the air, but he warned us there is worse to come and that 2012 will be a year of privation and suffering to make 2011 look rosy in retrospect.

Wilton and I and most of our friends are very, very, very lucky, simply because we are oldish and more or less retired. We have paid off our sunny flat in the center of Lisbon and our little farm, educated our children, accumulated some savings and stuck to our fairly simple tastes. We’re eating out less, not because the price of food has gone up so far, but because the VAT paid on a restaurant meal has nearly tripled. All salaries in the public sector and all pensions have been cut. The state pension, which is the only one that most older people get, comes after a working life of fairly steep deductions and is much closer to a retiree’s final salary than American Social Security. It has been cut by two months a year. This was done by declaring that no one will receive the 13th and 14th month bonuses paid at Christmas and at the August holiday. These two extra months, which came in after the Revolution in 1974, helped people catch up financially, so losing them is disastrous for most people.

Thousands of shops, factories and restaurants have already gone to the wall all over the country, which makes for boarded-up facades and grass growing between the cobblestones. At the moment any clothing shop that has survived thus far is advertising on-going sales with discounts of 70 or 80%. It’s hard to tell if they are doing this simply to compete, or just to get rid of as much stock as possible before closing for good. Shops of the famous brand name “Zara” (stylish but inexpensive clothes, worn at times by the Duchess of Cambridge!) are practically giving away their stuff, but since Zara has become an international brand it won’t close altogether, we hope, but just reduce the number of outlets.

On our street huge red “for sale” signs are plastered on many floors of the large former apartment buildings (when we moved here in ’76, a friend of mine called it “an old fascist neighborhood”) that were turned into offices during the seventies and later. On floors across the street where we used to see people working into the night (to save the firm?) the windows are now dark. We figure that when the posh shops (Stivali, Escada, Max Mara, etc) on the ground floors go dark, our block will become slightly spooky at night.

For the first time in the forty years we’ve been here, there are people, mostly young guys, riding bicycles in Lisbon. No one thought this would ever happen, because the city is built on seven hills and car traffic was fierce and dangerous. It’s possible some of these kids have done the “Erasmus” exchange year and spent time in university in some other part of the EU where bikes were standard. In any case, car traffic is growing sparser by the day, so now the whizzing bicycles look fairly safe.

Being semi-immune can make one feel grateful to be spared and then very guilty when we compare ourselves to the unemployed, especially in factory towns where the one employer has closed down, so various members of a family may lose their jobs on the same day.

The plight of the young of all social classes is deeply disturbing. No matter how enterprising, neither university graduates nor Joe Six-Packs can find jobs. They’re being advised by their parents (and by our new Prime Minister in an unguarded moment) to emigrate. But emigrate where — when the rest of Europe is going under? The Prime Minister mentioned Angola and Brazil (Portuguese-speaking former colonies) as plausible for the thousands of newly-graduated teachers for whom there are no jobs. Brazil replied at once: ‘Don’t look at us,’ and Angola doesn’t want the Portuguese back again, although thousands have gone there anyway. The Brazilian consulate, according to a friend, has a backlog of 50,000 applications for working papers at the moment, and everyone knows a few kids who have just “parachuted in,” hoping to get legalized later on. A full-page ad for Vespa says, “If you decide not to emigrate, buy a fuel-efficient way to get around.”

By now I have read hundreds of articles about the Euro crisis, the mismanaged banks, the hare-brained and/or corrupt politicians who averted their eyes from encroaching disaster, the ravages of globalization. One article of faith among the people who speak with authority (and who would be Republicans in the USA) is that the European “social state” is totally obsolete and unaffordable. The “social state” (which the Portuguese adopted after the Revolution in 1974 when they cast off the last surviving semi-fascist regime in Europe) presumes that a humane society includes a virtually free national health service, a state-financed school system, state financed universities, and some provision for the poor, neglected, and handicapped. The European Union is built on this model, and although adopting a one-size-fits-all currency (the Euro) may have been premature or otherwise mistaken, the EU itself, as our daughter Ana says, is one of the noblest experiments in human history: 550 million people spread across a continent, signing up to enlightened policies about health, education, employment and the environment.

But when the crise began and the financial rating agencies (Moody’s, Standard and Poor’s, Fitch) were clearly exercising more clout than elected governments, the dismantling the “Estado Social” began in earnest. Our new prime minister is a pleasant enough young man, but he is a “liberal” who wants a market economy at all costs. (“Liberal” in this part of Europe has a diametrically opposite meaning from “liberal” in the USA. Liberal ideas here mean favoring laissez-faire economics, and rule by the markets, with a minimum of protection for the weak.) When the Troika came up with proposals for removing rent controls and “liberalizing” the housing market, which meant abolishing measures that traditionally protected the elderly, poverty-stricken, or handicapped from rent rises, a young woman government minister blurted out that they were talking as if no human beings were involved. (This was reminiscent of an Italian minister, also a woman, who burst into tears when announcing cuts in old-age pensions.) Lazy and/or villainous people (“malandros”) have exploited the social state, of course, but on the whole the Portuguese are more apt to consider that malandros are outnumbered by “coitados.” The ratings agencies with their sudden swoops — “Portugal is “lixo” (‘junk’) now!” said the headlines when Portugal was down-graded yet again — are bogey-men, too disembodied to be attacked.

People are convinced (without much statistical support so far) that we are in the grip of a new crime wave. The crimes that get TV coverage are less violent and more entertaining than in places like the US: bank cash machines in suburbs or provincial towns being wrenched from their niches by men driving back-hoes in the middle of the night. Or rural crimes, like an item about country people who wake up in the morning to find that someone has raided their woods and stolen pine cones so as to extract the pine-nuts, which are a cash crop if you can get your hands on enough 20 kilo sacks of them. Copper wire is being stolen at such a rate that 400,000 subscribers have lost their phone service.

“Solidarity” is a watch-word, though most of it probably takes place within families. Now middle- aged parents are providing for their grown children. The “Banco Alimentar” gathers large amounts of food from supermarket customers for distribution to needy families. During school vacations like Christmas, the public schools continue to open and to serve breakfast, lunch and a late afternoon snack to children whose families clearly cannot feed them. Lots of the unemployed probably survive by working in the very large “parallel economy” which exists wherever services like hairdressers and cafes can get away without giving receipts.

Years ago we began to read articles and see television news segments about deserted villages in the “interior,” where the last inhabitant has just died at 101. As farming declined and the population gravitated towards the coast and to big towns, the birth-rate has fallen steadily. Now Portugal has a birth-rate of 1.5 children per woman, which is low even in shrinking Europe. A recent article presented touching interviews with youngish women who say that having a second child is now completely out of the question for financial reasons, no matter how much they long for one. The health service has closed several maternity hospitals for lack of activity.

Wilton and I go once or twice a week to concerts at the Calouste Gulbenkian Foundation which has a superb music program. The audiences seem not to have dwindled so far, but they are strikingly elderly (a sea of white heads!) which makes us wonder who will be around fifty years from now. Will there by anyone of purely Portuguese origin? Some of the Ukranian, Moldavian and Polish immigrants have gone home, leaving behind Brazilians, Africans, and a growing number of Chinese — also Rumanian gypsies, who must still see Portugal as a fairly tolerant place to be a professional beggar. Lisbon neighborhoods and all decent-sized provincial towns have Chinese shops which sell junky clothes and household stuff. Suddenly some of the Chinese shopkeepers have shifted to fruit, another mystery. Either the market for plastic junk is saturated or they figure that no matter how poor people are, they still have to eat.

Real estate prices are falling… and falling… and falling. If you hanker to buy a breathtaking apartment in Lisbon, possibly carved out of an 18th century palace, or perhaps a stately home surrounded by vineyards in the north of Portugal, or a long, low farmhouse with a few cows grazing on gently rolling golden fields in the Alentejo, this is your moment.

Dr. Johnson said that “when a man is tired of London he is tired of life.” He was doubtless thinking of intellectual stimulation, not physical beauty and definitely not kindly sun and intensely blue skies, so it’s hard to know what he would have said about Lisbon. But I think no one tires of it as they might tire of, say, Los Angeles. Over my nearly 40 years here, I have come to love the city with a deep affection I’ve never felt for another (even Boston or New York!) The light is matchlessly beautiful as the afternoon shades into evening. The old neighborhoods are a mixture of shabbiness and charming restoration that has brought back the old colors: ochre, salmon, pale pink and green. Everything feels human-sized, safe, cozy. I cannot imagine living anywhere else. It’s true the Portuguese are often said to be subdued and melancholy (listen to some Fado!). And compared with the Greeks they must be: we are not Mediterranean, after all, but Atlantic. By now, I find this ambiance not only restful but entirely normal. (When Ana is home from London or Brussels and we catch a glimpse of Americans on TV (on “Oprah” or “Dr. Oz”) their manic enthusiasm looks forced and we laugh at “those happy, clappy Americans” as the Brits say.

There’s a lovely song by Stephen Foster, “Hard times, hard times come again no more.” I don’t know of one that corresponds in Portuguese, although the language has lots of expressions about hard times: years are either ones of “vacas gordas” or “vacas magras” (fat cows or thin cows) or “Quem nấo tem cấo, caҫa com gato” (“Who has no dog must hunt with his cat.”) Maybe the resignation of rural folk will have to do, for a while.

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