Portugal's Opposition Contests Benefits Of EC Membership

THE campaign leading up to Portugal's general elections Sunday has come to focus on difficulties surrounding the country's rapid economic growth.Jorge Sampaio, leader of the 20-year-old Portuguese Socialist Party (PSP), is challenging Social Democratic Prime Minister Anibal Cavaco Silva, whose supporters call him the champion of Portugal's integration into the European Community (EC). But while Mr. Cavaco Silva points to Portugal's annual economic growth rate of 4.6 percent, Mr. Sampaio counters that what has grown most has been the gap between rich and poor. The populace is burdened by pressures that include high taxes and interest rates, housing shortages, and poor services, says Marques De Costa, a PSP spokesman. He concedes that his party has only a slim chance of winning Sunday's election, but says economic problems will not disappear afterward. Interest rates, hovering around 25 percent, have a mixed impact. They provide a favorable return on investment, so the domestic savings rate among those who do not have to immediately spend their earnings is substantial. But high rates also make borrowing prohibitive for most Portuguese. Cavaco Silva reminds voters that they have enjoyed increased social mobility in recent years - a result, he says, of the country's booming economy. Mercantilism and a thriving service sector have emerged from the construction and business development produced by Portuguese and European investment. Finance Minister Miguel Beleza told international bankers last week that the country has modernized its industrial base and expanded roads, tunnels, and telecommunications. Portugal's living standards are nearing its EC partners, he says. De Costa is skeptical. "That doesn't mean that our classic industries have been restructured - that they're more efficient compared to those of our European partners." Textiles and leatherworks, both labor-intensive sectors, represent 30 percent of the production base. Labor-intensive industries "were not a problem before we joined the EC," De Costa says. "But now we have to pay our workers on the EC level." Still, the flow of money from EC headquarters in Brussels has literally changed the Portuguese landscape. The EC's technical and financial support can be seen in many places, especially in the center and south of the country. Signs along roads and at construction sites indicate areas where EC funds have settled. The Socialists are calling for the government to push for greater EC assistance to plants and factories now competing on a Europe-wide basis and for programs to help agriculture. Portuguese farmers, who seem to have planted every square acre of tillable soil, are anxious for EC advantages. Fuel prices and interest rates for Portuguese farmers are higher than elsewhere in the EC. The level of technology, and hence production levels, are lower. Because farm conditions are relatively poor and little has been done to promote the welfare of farmers, "there is no incentive for our youth to stay on the farms," De Costa says. Despite such claims of backwardness, the government points to the literacy rate as an indicator of progress. In 1974, nearly one-quarter of the population could not read or write. Today, illiteracy has fallen to 15 percent. But De Costa says remaining illiteracy reflects the government's low priority on education. Cavaco Silva's government, which has enjoyed the propaganda services of state-controlled television during the campaign, has stressed the instability of a Socialist-led minority government. The Socialist response, says De Costa, is the party rallying cry: "A Safe Change."