The report says anti-austerity measures have increased employment and growth and cut down the deficit.
A new report has claimed that anti-austerity policies pursued by the left-wing government of Portugal have boosted the Portugese economy.
The report, authored by Red Pepper founder Hilary Wainwright, argues that increasing spending and cutting taxes created jobs, increased economic growth and reduced public debt.
In return for a bailout, the European Union imposed privatisations and cuts in salaries, social security and services on Portugal – through a centre-right Portugese government.
After elections in 2015, the centre-left Socialist Party formed a coalition with the Communist Party and another left-wing group called Bloco Esquerda.
These left-wing groups helped pressure the Socialist Party into an anti-austerity programme.
Recently privatised companies were re-nationalised, the minimum wage rose by 20%, four national holidays were re-established and pensions were unfrozen.
As well as spending increases, taxes were cut on consumption in restaurants and on wages – although taxes were increased on luxury real estate and large firms.
The economic effect of this, the report says, was the return of economic growth. This was 4.3% in 2016/2017 after falling 7.9% during the austerity measures.
Unemployment fell from 17.5% in 2013 to 7.4% now and the public deficit reduced from 3.1% of GDP in 2015 to virtually zero now.
A public deficit is when a country’s spending is more than its income – the UK’s deficit is 1.9% of GDP.
The report points out that this was all possible while remaining in the European Union – and while following the EU’s rule that budget deficits should not exceed 3%.
In his foreword to the report, Labour MP Clive Lewis said that the Portugese example had lessons for the UK. He said:
““Portuguese socialists were able to prove that austerity measures had been broadly economically damaging as well as ideologically driven. In doing so
the country proved both an inspiration to others and a test bed for a new relationship between individual nations and the institutions of the EU.”
“This is a significant intervention for those on the left who argue for a Brexit, or “Lexit”. Many of the rules that are seen as obstructive to the socialist vision, whether on public ownership, outsourcing or state aid, are either misunderstood, have been superseded or are flexible.”
“You do the EU no favours by ignoring its faults, but it is not a fixed entity, and what look to be its long‑term strategic goals are subject, always, to the will of its members. It can only realise the ambitions of its founders, of peace, reconciliation, solidarity and broadly distributed prosperity, if its component nations are fighting for those ends.”
To reach hundreds of thousands of new readers and to make the biggest impact we can in the next general election, we need to grow our donor base substantially.
That's why in 2024, we are seeking to generate 150 additional regular donors to support Left Foot Forward's work.
We still need another 124 people to donate to hit the target. You can help. Donate today.
20 Responses to “In Portugal, anti-austerity policies have boosted the economy, says report”
Tom Sacold
No mention of the EU enforced reduction in workers rights as part of the EU’s “stabilisation policy” !!!
Dave Roberts
I was interested in this article until I got to where it was from and who had written it. Hilary Wainwright of Red Pepper. La la land.
Graeme Kemp
Where/how can we read this report?
Dave Roberts
http://www.redpepper.org.uk is the site but there is no sign of the report. I’ll do some more trawling and see what I can find.
Dave Roberts
Can’t find anything I’m afraid, maybe the writer of this article can post a link. I’m always sceptical of these think tanks of these think tanks and institutes as they peddle their wish lists based on anything except reality. A prime example is ” The New East End” by Kate Gavron and Geoff Dench of The Young Foundation which is largely fiction. I was born and bred in the East End and can’t recognise the area and the processes they describe so take all of these “reports” with a pinch of salt.