Looking for a success in the euro crisis adjustment programs: the case of Portugal

Ricardo Reis

No 10972, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Portugal?s adjustment program in 2010-14 under the troika was extensive and aimed at addressing its large debt and anemic growth, so it may serve as a blueprint for reforms in the Eurozone. This paper argues that, conditional on a diagnosis of the underlying problems of the Portuguese economy, the adjustment program failed to deliver in definitely addressing the problems in public finances, but succeeded in leaving promising signs of reform in the structure of the economy. In particular, on the negative side, public debt is still high, primary surpluses improved modestly, and public spending barely fell as the problem of ever-rising pension payments remained unsolved. On the positive side, unemployment fell sharply, exports and the current account balance rose, capital and labor reallocated to more productive and tradable sectors, and the country is growing faster than the EU for the first time in 15 years.

Keywords: Fiscal austerity; Fiscal consolidation; Structural reforms (search for similar items in EconPapers)
JEL-codes: E65 F44 F45 H63 O52 (search for similar items in EconPapers)
Date: 2015-12
New Economics Papers: this item is included in nep-acc and nep-mac
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Citations: View citations in EconPapers (24)

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Journal Article: Looking for a Success in the Euro Crisis Adjustment Programs: The Case of Portugal (2015)
Working Paper: Looking for a success in the euro crisis adjustment programs: the case of Portugal (2015)
Working Paper: Looking for a success in the euro crisisadjustment programs: the case of Portugal (2015)
Working Paper: Looking for a success in the euro crisis adjustment programs: the case of Portugal (2015)
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