guilt by association

IMF forecast adds to Portugal’s gloom

European Union, European Central Bank and IMF officials began negotiations on the terms of the rescue programme in Lisbon on Tuesday as the Washington-based Fund projected that Portugal would be the only developed country to suffer a recession next year, with output declining by 0.5 per cent after a fall of 1.5 per cent in 2011.

Although the EU is leading the negotiations and will supply most of the aid, the Portuguese generally refer to the rescue as an "IMF bail-out", shorthand for what many see as the unpleasant face of global capitalism. (...)

Vítor Bento, an economist, said Portugal had been demonising the IMF as "a big bad wolf" since foreign payments crises in the late 1970s and early 1980s, when the country negotiated two standby agreements with it. (...)

Mr Bento, who is also chief executive of the Portugal bank payments company Sibs, said the memory of past crises has led many Portuguese to ascribe their hard times to the IMF and not to the economic difficulties that required its intervention.

"When a country reaches such a critical situation that it needs the help of the IMF, it will inevitably have to make a big economic adjustment," he said. "To blame the IMF for that adjustment is just ideology and propaganda."