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LISBON (Reuters) - Sergio Alves had been off heroin for a year - a tough year to stay clean in Portugal, as the debt-laden country weathered more painful austerity measures after an international bailout and sunk into its worst recession since the 1970s.
As tax hikes gnawed into the grocery business he runs with his wife and the stress mounted, Alves relapsed. Now back in rehab, the 30-year-old is glad he can fall back on the free state-run centre for drug addicts, where he says few signs of austerity are visible yet.
"The business was bad, my life became just the work-home routine. I took to heroin again to forget," he says. "But I knew heroin was going to destroy me, and I have a daughter now ... So I rushed to the centre and they gave me another chance."
Portugal's famously liberal drug policy has been held up as a model for other countries - Norway is considering adopting parts of it and countries as far afield as Argentina have expressed interest. But experts warn that budget cuts and the threat of more cuts to come - combined with an increase in hard drug abuse - risk turning it into a shadow of its former self.
"We have a certain responsibility to maintain the essential despite the recession," said Joao Goulao, the national drugs agency chief. "Other countries do look at us and seek our expertise. If we divest too much, then one day we'll have to talk about the Portuguese drugs policy in the past tense."
Ageing but spacious and well-kept, Lisbon's Taipas rehabilitation clinic is one of over 40 such clinics across the country, the result of Portugal's 11-year-old pioneering drugs policy which decriminalized drug use while offering free treatment and state-funded street-work programs.
It is places like this that are likely to bear the brunt of future cuts.
"We've already suffered some budget cuts, but maintained the essential intervention services. Now the budget for next year is prepared and ... I'm afraid it is inevitable that there will be more cuts," said Goulao.
Meanwhile, the share of injecting drug users who sought help via the agency's centers doubled last year to 14 percent and looks set to rise further, though it still remains well below the peak of 36 percent registered in 2000.
"We see more drug use linked to desperation - mostly heroin, the comfort drug," Goulao said. "There's no doubt the economic and social conditions are making the drug phenomenon worse."
Unemployment is at a record high of over 15 percent, and many people are leading precarious existences. Eurostat said one fourth of Portugal's 10 million population was at risk of poverty and social exclusion in 2010, the last year for which data is available - since then, the situation has got worse.
Goulao, who is also the chairman of the Lisbon-based EU drugs agency EMCDDA, said the euro zone's most crisis-hit member Greece has already shown that excessive budget cuts cause a sharp rise in drug use and AIDS infections.
In Portugal's case, he says the risks are even greater.
In 2001, Portugal decriminalized all drug use as well as possession for personal use in an attempt to try and tackle a serious heroin problem that had caused an outbreak of HIV/Aids among drug users. Huge open-air drug markets were a common sight at the time in some areas.
Since then, the rate of injected drug use has halved to about 0.5 percent of the population, below levels in Britain and Italy. The number of new HIV cases has also declined - the share of injecting drug users fell from about half of all new cases in 2002 to 17.5 percent last year.
Overall drug use in Portugal is now below the European average, according to the EMCDDA. Drug busts by police have also gone up.
"A very big measure of success of the policy is that it brought political acceptance. The new centre-right government includes people who used to be very opposed to it, but no one is trying to reverse it," said Brendan Hughes, an EMCDDA analyst.
"There is no simple answer if the decriminalization itself is a success or failure. But most of the numbers are going in the right direction," he said.
The law treats users like Alves as voluntary patients not criminals. People caught using drugs, still an administrative offence, are not processed through the justice system but are referred to medical "dissuasion commissions" instead.
The legislation is among the world's most liberal, more liberal than, for example, the Netherlands, where people caught in possession of drugs other than cannabis can go to jail.
Goulao says decriminalization - which allows the police to focus more on drug dealers and unclogs the justice system - is "no magic bullet", but that it works when combined with state-funded treatment and prevention.
Heroin use typically takes off during times of economic hardship and replaces "power drugs" such as cocaine because it is relatively cheap and gives users a few hours of emotional comfort.
Mostly injected, it can spread blood-borne diseases such as HIV or hepatitis when users share the same syringe or needle - behavior that becomes more common when money is tight.
"It's easy to buy, easier than cannabis," Alves said. "Pushers dilute it with talc and dust, but it still works."
Some experts believe the drug treatment program has already been weakened after Goulao's autonomous IDT agency and its 1,700 staff was merged with the country's National Health Service as part of the government's cost-cutting process.
"It was the worst possible moment to do it due to the budget cuts that all the healthcare service suffered," said Joao Semedo, deputy chairman of parliament's healthcare committee from the opposition Left Bloc.
The health service lost almost 10 percent of its budget funds in 2012.
"This integration amid the crisis and with healthcare in a shambles can only yield bad results. We already see teams being suspended, programs on the ground discontinued, (and) the end of financing for projects with a high social impact," said Semedo.
APDES, a non-governmental agency for social projects, warned in a report earlier this year that a range of harm reduction service providers were facing bankruptcy, while the "IDT closure endangers the future of the drug treatment system in general".
Risk-reduction mobile units distribute free needles, condoms and carry out medical exams in problematic neighborhoods.
Marta Pinto, who authored the report, says most drug-related projects have since survived and that tenders have been opened to guarantee financing of the projects until December, but says the situation remains shaky.
"After December, I don't know what's going to happen and obviously I'm worried," she said.
In a further blow, the funding of risk reduction projects from the national program for HIV/Aids - projects closely linked to drug-related work - has been slashed to 1.5 million euros from 9 million euros a year earlier, with no guarantees that existing projects will continue, she said.
Alexander Kentikelenis, a sociologist at Cambridge University, said that even the Greek government is slowly reinstating prevention programs because it had been scared by last year's 12-fold jump in HIV infections among drug users.
"There is a lesson there. The government will think twice now before cutting further in this area," he said. "Such spending has to be countercyclical. People need it the most in downturns, not when your economy is growing."
Editing by Andrew Osborn