Abstract
Portugal’s economic crisis was characterised by the experience of ‘all of the signs of overheating … without any acceleration of GDP’ (Deutsche Bank 2010). This chapter traces how the introduction of European Community/European Union (EU) facilitated ‘structural reforms’ throughout the 1980s and 1990s contributed to the development of new and dangerous patterns of debt-led growth. In the 1990s, a rejuvenated private banking sector drove the expansion of economic growth in Portugal’s non-tradable sector, damaging the country’s competitiveness and creating some of the highest levels of private debt in the EU. This trajectory of economic growth contributed to a decade of recession in the 2000s, ensuring that Portugal was particularly vulnerable to contagion from the Greek and Irish crises from 2010 onwards.
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Notes
- 1.
That is despite the fact that Salazar had resigned in August 1968 due to health problems, and it was his successor Marcelo Caetano who was to be the last prime minister of the Estado Novo regime.
- 2.
Figures cover the period from 1986 to 2000.
- 3.
The discussion of this paragraph draws on the detailed account of Decressin and Mauro (1998, see especially pages 5–10).
- 4.
The Multi-Fibre Arrangement was an international trade agreement on textile and clothing, which imposed quotas on the amount that developing countries could export to developed countries.
- 5.
The EU adopted an active role as a broker, and critical momentum was created by various EU proposals in the late 1990s, which granted China transition periods for certain conditions, as well as the EU–China agreement of 2001 which helped lay important groundwork for formal accession (Mortensen 2009: 86).
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Dooley, N. (2018). Portugal’s Economic Crisis: Overheating Without Accelerating. In: Parker, O., Tsarouhas, D. (eds) Crisis in the Eurozone Periphery. Building a Sustainable Political Economy: SPERI Research & Policy. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-69721-5_4
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