PORTUGAL: A SWINDLER GROWTH

After a cheerful and vibrant weekend for the portuguese - a visit from Pope Francis to Fatima, a championship won by Benfica and the unprecedented and resounding victory at the Eurovision song contest; we also had the announcement that Portugal had a 2,8% economic growth in the first quarter of this year.

If we check portuguese and some international media, we deduct  that Portugal, after a very serious crisis which has shaken but not overturned the existing “status quo”, is now on the "crest of the wave". The growth of tourism, exports and foreign investment (real estate for example) attest the external factos are being more significant than domestic ones and are promoting the favorable economic performance over the last years.

This situation boosts current socialist government – austerity continues though at lower levels.  Most importantly, the increase of the foreign investment is a consequence of the international scenario: drop in oil prices, crisis in Syria and Middle East and the widespread crisis / stalemate that is crumbling in key EU countries.

The previous right-wing government, although it had applied well-known austerity measures, was implementing measures promoted by Troika, and eventually applied this austerity in disproportionate portions.

Despite different policies and the rhetoric which distances the last two governments, current economic outcomes are unlikely to differ greatly regardless of whether we have a leftist or right-wing government.

António Costa’s government, continues eagerly following the Socratic’s government steps. One shouldn’t neglect Socrates also presented very interesting economic statistics beforeTroika’s intervention.

Passos Coelho, the former Prime Minister could have had a feast for having met austerity and the country survived the crisis. Unfortunately, in effect the portuguese right wing doesn’t proceed the liberal policies which value the investment, the competitiveness and the productivity.

As for the current government, it masters the art of the illusion through an efficient propaganda. That will probably bring victories to the Socialists both in the next local government and legislative elections.

This country has recently reached unique standards in music, tourism and sport, but at political level it continues a doldrums of ideas.

In short, let’s not forget what recent economic history taught, especially over the Socratic government period.

Miguel Verde - Senior Consultant, Professor of International Relations