Job prospects are grim, health and education are in crisis and, with more austerity to come, emigration is increasingly the only solution

Young men like Bernardo Lima are close to giving up on Portugal. Although he speaks five languages and has a degree in international relations, he has only been able to find bar work since he graduated three years ago and uses his skills merely to serve tourists.

"The future in Portugal is grim. I've often thought of emigrating. My brother lives in Finland and I may join him. He found work there quickly, as an architect," Lima said between making cups of coffee in a central Lisbon cafe.

The latest figures show that in 2011, after a respite of about 15 years, Portugal went back to being the country of net emigration it had been for centuries, and the government has now set up a website to advise job seekers heading abroad. Many more will follow in the footsteps of Lima's brother, leaving a country famous for the melancholy of its most famous poet, Fernando Pessoa.

On 5 April, the constitutional court cast doubt on a government austerity programme by ruling against proposed cuts in holiday bonuses for civil servants and pensioners, as well as other reductions that would have trimmed the budget by €1.3bn in order to meet tough targets set by international lenders.

Two days later, prime minister Pedro Passos Coelho said the ruling forced him to find further savings, although unions say education and health services are already in a parlous state after several rounds of cuts since 2008. Teachers and health workers fear deeper cuts threaten to turn the clock back 40 years to when the country was an impoverished backwater and mass emigration offered the only way out.

In Brussels, the warning lights have begun to flash. How much more pain can the Portuguese take before they say "enough" and trigger yet another eurozone crisis, right next door to Spain?

Only 11% of Portuguese stay on at school until 18, the Portuguese Teachers' Federation estimates, well below a European average of 46%, and that hobbles the economy. Middle-school teacher Graça Dias cannot see how Portugal can catch up while the classrooms are crowded, schools are closed, teachers are sacked in droves and specialised subjects are axed from the curriculum.

"The big concern is over lack of investment in education leading to more backwardness for future generations," said Dias, who teaches history in Freiria, a village 30 miles from Lisbon.

She says that standards have risen since she began teaching 25 years ago, "but now we're regressing 50 years. All that matters today is teaching the three Rs, not making people think." Some schools, particularly those in rural areas, are asking parents for money or raiding tuck shop takings to buy toilet rolls, Dias said. "And with more cuts this absurd situation could become widespread."

Healthcare is also under pressure. "Today, nurses complain that drips are of such poor quality they have to go through three or four to find a good one, and swabs fall apart and leave bits of lint in the cuts they are meant to clean," said José Carlos Martins, president of the Portuguese Nurses Union.

The union estimates that one million Portuguese avoided going to see a doctor last year, and 500,000 went without treatment, due to measures which include raising once nominal contributions in casualty wards to as much as €50. In the past four years, some 3,000 out of 37,000 nurses have lost their jobs.

Martins also notes that Portugal's health service made savings of €845m in 2012, far more than the €550m ordered by the International Monetary Fund, the EU and European Central Bank as a condition of bailing the country out.

"The prime minister's announcement of more health cuts is absurd," he said. "We reckon that deep down the government's aim is to use this fuss over the constitutional court to speed up privatisation of public services."

"The EU and the ECB are garrotting the economy," Aménio Carlos, leader of the General Confederation of Portuguese Workers said while overlooking disused shipyards on the Tagus.

"They say social spending must be cut, but at the same time wealth cannot be created to kickstart the economy. This is criminal," he added. "There are old people who cannot afford medicines, and that is condemning people to death."

Carlos says Portugal has untapped potential in agribusiness, while fisheries and shipbuilding could thrive in a country with a long seafaring tradition. Other possible growth-drivers include mining and exporting rolling stock to its former African colonies.

"This government behaves like someone who has been wounded, knows they haven't long to live and is ready to take as much revenge as possible," Carlos said.

Portugal has over the generations turned fatalistic resignation into an art form. People were said to be able to withstand anything, as long as they had fado music, football and the Virgin of Fátima. That all changed in 1974, when people took to the streets and ended half a century of dictatorship after a revolt by junior army officers. Just 12 years later, Portugal was an EU member and a mainstream European democracy.

"We put up with things, and then some, but when the explosion comes the outcome isn't peaceful at all," said Vasco Lourenço, who as a 31-year-old captain helped organise the "Revolution of the Carnations", as it became known.

Lourenço pointed out that Grândola Vila Morena, the folk song whose radio broadcast was the secret signal to start the revolt, was becoming popular again and he saw several parallels with 1974.

"All that makes up the welfare state in most European countries only came about in Portugal after the revolution. Today, that is all being destroyed," he said, just a couple of blocks from where the Salazar regime threw in the towel 39 years ago this month.

"I don't think it's possible to withstand things much longer without a popular revolt, or a social explosion," Lourenço added.