Portugal and the Global Crisis - The impact of austerity on the economy, the social model and the performance of the state (original) (raw)
2014, Friedrich Ebert Stiftung
Successive Portuguese governments have followed the orientations of the European« institutions regarding the response to the emerging challenges, since the international financial crisis. The new conservative government (elected in 2011) took advantage of the situation of »limited sovereignty« and made a radical political shift. The new policy aims at a fundamental change in socio-economic power relations by deregulation and challenges the institutions of social dialogue created during the past 40 years. The austerity imposed by the Memorandum of Understanding (2011) launched the country into a deep recession that had devastating impacts on some sectors of the economy. The young and precarious workers were particularly affected, with youth unemployment rising to 37.7% (2012 and 2013). More poverty, more unemployed with less benefits, substantial cuts in old age pensions and the national health service in cost contention: Austerity and recession bring growing social problems while reducing public responses to these problems. Meanwhile public debt is skyrocketing, despite of recent signs of economic recovery and some success in reducing the current public deficit. The risk is that the therapy will destroy the social equilibrium the country had achieved during the past four decades without curing the disease of the unbearable public debt.
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