Portugal

report 2014

Development cooperation strategy and more social protection is needed

Since joining the Euro in 1999, Portugal has had the lowest growth in the Eurozone. Between 2001 and 2007 Portugal experienced only 1.1% average annual growth. The government deficit was -6.5% of GDP in 2005 and it was -3.1% in 2007. When the global financial crisis occurred, a drop in tax revenues and the money allocation to support commercial banks, led to further increases in the government deficit and in general gross debt. At 108.1% in 2011, Portugal had the third highest general government gross debt to GDP ratio in Europe (EU27), behind only Greece and Italy (Eurostat, 2012a). As debt continued to grow investors were unwilling to lend and in May 2011 Portugal was the third country to seek a ‘bailout’ from the EU-ECB-IMF troika. The austerity measures accorded between the Portuguese Government and troika, are responsible for major setbacks. Many basic economic and social rights that were guaranteed are now being either questioned or neglected. In this scenario, the development cooperation public policy that contributed significantly to the achievement of the Millennium Development Goals (MDG) also suffered a major negative shift.

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Since joining the Euro in 1999, Portugal has had the lowest growth in the Eurozone. Between 2001 and 2007 Portugal experienced only 1.1% average annual growth. The government deficit was -6.5% of GDP in 2005 and it was -3.1% in 2007. When the global financial crisis occurred, a drop in tax revenues and the money allocation to support commercial banks, led to further increases in the government deficit and in general gross debt. At 108.1% in 2011, Portugal had the third highest general government gross debt to GDP ratio in Europe (EU27), behind only Greece and Italy (Eurostat, 2012a). As debt continued to grow investors were unwilling to lend and in May 2011 Portugal was the third country to seek a ‘bailout’ from the EU-ECB-IMF troika. The austerity measures accorded between the Portuguese Government and troika, are responsible for major setbacks. Many basic economic and social rights that were guaranteed are now being either questioned or neglected. In this scenario, the development cooperation public policy that contributed significantly to the achievement of the Millennium Development Goals (MDG) also suffered a major negative shift.

The policy response to the 2008 financial crisis, was the implementation of a progressive stringent set of austerity measures: freezing of nearly all insurance benefits and pensions, reducing the pensions tax allowance, reduction in means-tested unemployment assistance, family benefit and social assistance, increase in standard VAT rate (from 20% to 23%) including increasing the VAT on natural gas and electricity to standard rate, increase in income tax rates and reductions of tax credits, public sector pay cuts (up to 10%), reductions in numbers of employees in central Government and across public administration generally.

Human Rights International Treaties
ABCDEFGH
ILO Conventions
C 87 C 98 C 105 C 100 C 111C 138 C 182
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