Lisbon Letter: "Bad Years Ahead" warned the headline on the front page of Saturday's weekly English language newspaper here, the Portugal News.
It was a more succinct but no less bleak political forecast than that contained in the stability and growth programme, which the socialist government handed over to the European Commission last Wednesday.
Inside this report were what may be some of Portugal's most pessimistic statistics since the country joined the EU in 1986. The 2.4 per cent economic growth predicted in the state budget earlier this year is now only expected to be 0.8 per cent. Unemployment may peak next year at a record high of 7.7 per cent (at the moment it is 7.4 per cent).
Most troublesome of all is the country's budget deficit, which threatens to hit 6.83 per cent of output in 2005. This is not just the highest deficit predicted for any of the 12 euro zone countries; it is also more than twice the limit allowed.
This means Portugal faces sanctions for breaching the 3 per cent budget deficit ceiling fixed when the stability and growth pact was thrashed out at the Dublin European Council in December 1996.
No wonder the Portuguese Finance Minister, Luis Campos e Cunha, is calling it the "current budget crisis" and planning to impose austerity measures to squeeze more cêntimos from the cash-strapped electorate.
Not that this is new terrain for the Portuguese. In 2001 the country became the first euro zone member to breach the EU ceiling, posting a deficit of 4.4 per cent of GDP. Such has been its historic struggle with its public deficit, former Prime Minister Anibal Cavaco Silva, leader of the Social Democratic Party, even had a pet name for it: 'the monster'.
It is difficult not to feel rather sorry for the new long-chinned prime minister José Socrates, who took office in March along with his Socialist Party.
He called his manifesto New Ambition, but before he unleashes any big ideas, his is an administration preoccupied with damage limitation. Already Socrates has admitted that 2006 will be economically worse than 2005 and that recovery will be only possible in 2008, when he hopes to reduce the deficit to 2.8 per cent.
In the meantime, he will have to hike interest rates throughout the next year, which may not win him too many fans. But at least, he may be thinking, the fuss should distract attention from those pesky allegations that he pocketed a tan envelope during his turn as minister for the environment in the late 1990s, when a giant shopping mall went up, unchallenged, in a nature reserve.
Now the "emergency measures" he is implementing have turned public attention back to basics: how will they affect my purchasing power?
Last month a poll published in daily business paper Journal de Negocios said that nearly two-thirds, 64.9 per cent, of all Portuguese backed the adoption of austerity measures to rein in the public deficit.
On Monday that same paper broke the news of a planned water price increase ("Only one or two cents per cubic metre" insisted environment minister Francisco Correia Nunes).
It also carried the story of how back in 2000 the Government promised to finance 80 per cent of municipal police force costs, but "five years on nobody has been paid anything".
These are the kinds of people Socrates hopes will play ball with his new measures, which include increasing VAT from 19 to 21 percent.
"The problem can't be solved by demanding more sacrifices from the same people," said Manuel Barbosa de Oliveira, vice president of the UGT trade confederation which represents most public workers.
The country's largest trade union, CGTP, has already announced two days of protest this coming month, which could be succeeded by civil service strikes.
Small wonder that the atmosphere in this city can probably best be described as subdued. The mournful Fado music born here in the early 20th century still seems perfectly fitting. On the streets of the Bairro Alto, men fry fish and women string their washing from the windows. Closer to the port, vendors hawk sunglasses and bars of hashish the size of a chocolat bar.
The average monthly wage last year was €1,148.
"Today, the name Socrates means more tax," said Martim Borges de Freitas, secretary general of opposition Democratic Party. "These taxes are not just going to penalise families, they're going to impede our economic growth too. And nobody wants that."
Perhaps, like his Greek namesake, Socrates believes in the necessity of doing what one thinks is right even in the face of universal opposition.