Portugal is Europe's hope in a climate of instability – The Economic Journal


The instability in the largest European countries seems to contrast with Portugal's view of the world, according to the editorial of the British newspaper Financial Times last Sunday, August 25.

“A little hope comes from an unusual quarter,” reads the start of the compliment to Portugal, which underlines the improved perspective of the rating Moody's. The country's success “stems from good political choices and a good deal of luck,” the publication rates.

"Prime Minister António Costa still has a lot to do in a country where public debt remains above 100% of GDP," the editorial maintains, although he assures that the Portuguese politician has reason to be more optimistic than his European counterparts.

The Portuguese contraption is also applauded by the newspaper, in contrast to Italy's alliance, which since 2015 has “remained stable and functional, which has led to a general increase in Portugal's fortunes”. The Financial Times points out that Costa's results were seen in rising public sector wages, which returned to pre-crisis levels, unemployment at 6.7%, and in Spain at 14%, and “the low crime rate and the welcoming atmosphere of Portugal have been a blessing. ”

Still, the editorial argues that the merit is not just for the contraption, as much was due to the global recovery and boom international tourism. The Financial Times also praises the “difficult but necessary work of the former center-right government” for the austerity program between 2011 and 2014, in exchange for € 78 billion from the ECB, the European Commission and the IMF.

“The measure helped reduce the budget deficit and public sector reform. It has also pushed the country into the worst recession in nearly four decades, leading to a mass exodus of workers, ”the editorial says.

“The shrewd Mr. Costa benefited from the legacy of harsh center-right actions,” although he presented himself as anti-austerity and his policies were dubbed 'light austerity'.

Still, not everything is complimented in the Financial Times editorial, as state officials protest the losses during the Eurozone crisis and the seven-day driver strike was highlighted in the international press.

The British publication was confident of a re-election by the prime minister "at the head of a left-wing coalition, or potentially even winning with the absolute majority." Still, he assures that "the prime minister must carry out deeper reforms of the country's outdated public administration", with work still to be done in the banking sector even though stability "has improved in recent years."

"As storm clouds join the world economy, Portugal must have a clearer view of its future economic orientation and strategies," the Financial Times editorial concludes.



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