If Portugal’s self-dubbed “good-pupil-of-the-troika” government was hoping for a good report card this Christmas, it has been hugely disappointed.
Despite all the political spin orchestrated by policymakers throughout the year, Brussels has given the country’s performance since its so-called clean-exit in May from the bailout programme a resounding thumbs-down.
In the first evaluation to come from the European Commission in Portugal’s “post-troika” period, Brussels considers “the appetite for large-scale structural reforms seems to have disappeared” while there does not appear to be any kind of consensus over a medium-term strategy for economic growth.
The commision is equally pessimistic over the government’s decision to raise the minimum wage to €505, warning this could “make poverty
permanent for those still without a job” – and it stresses that the State’s reduction in public sector workers still has a way to go.
The damning report took no prisoners as it rounded on the urban rental market, saying the government has to start tackling this more seriously.
According to Dinheiro Vivo website, the report stresses Portugal has to initiate “anti-fraud actions” – particularly in the “worrying” clandestine sector which the government appears to have stopped worrying about.
Says the website: “The commission recalls that the government announced it intended to increase its efforts to combat tax evasion in the rental market” but that it has still “been unable to come up with a definitive study”… something that was requested during the adjustment programme”.
Brussels’ lack of confidence in Portugal’s performance is nothing new (see Resident article: https://www.portugalresident.com/fears-loom-over-portugal%E2%80%99s-budget-deficit)
but this latest report will come as a bitter pill for PSD leaders who hope to win a general election next year.
Meantime, President of the Republic Cavaco Silva has downplayed the uncertainties, simply stressing that Portugal’s problems are “far from over”.
In a speech at the annual meeting of the Council of the Portuguese Diaspora in Cascais yesterday, the head of state admitted that “Portugal still faces severe restrictions and will have high demands placed on it in future. It is an illusion to think the country’s problems are resolved”.
Brussels comes down hard on “good pupil” Portugal
