Portugal joined EU in the 1986 and since then has remodeled its economy in more than one way. Portugal's economy was mostly based on production of agricultural products, where about two thirds of the country was employed in this sector. After joining the EU Portugal has diversified its economy and its major industries now include: automotive components, tourism, textiles, footwear, wood products, metalworking, oil refining, chemicals, wine, pulp and paper. As a member of EU, Portuguese tertiary sector boomed, more precisely services. This has contributed to countries bureaucracy problem, which implies Portugal to have one of the most complicated and inefficient bureaucratic systems of the world.
Even though Portugal experienced some growth during the 1990's, it still remains a country with a GDP per capita well below European average. In 2007-2008 Portugal's GDP per capita was about €15.500, whereas the GDP per capita for 2011 was about €15.195. This shows that the EU crisis has had great effect on Portugal's economy, not only that the purchasing power of consumers was diminished, but also the overall level on economic activity slowed down. Portugal has been hit by European debt crises severely and over past few years has experienced great domestic budget imbalance, low productivity, slow or negative growth and great pressures from the EU and the rest of the world.
[...] This is the real challenge for the Portuguese economy. These governance problems must be solved to permit the economy to come back to its long-run growth path. REFERENCES Caldwell, A. (2012) Employment Law In Portugal And State Of Austerity Reforms, available at: http://www.crossborderemployer.com/post/2012/10/01/Employment-Law-In- Portugal-And-State-Of-Austerity-Reforms.aspx, viewed: 5 Jan 2013 Chan, S.P Debt crisis: as it happened, October The Telegraph, October viewed: 25 December 2012, http://www.telegraph.co.uk/finance/debt-crisis-live/9583150/Debt-crisis-as- it-happened-October-3-2012.html Duhaček Gordon 2012, Mjere štednje guraju Portugal u bankrot, available at: http://www.tportal.hr/vijesti/svijet/178140/Mjere-stednje-guraju-Portugal-u- bankrot.html#.UOhx6G_AfWZ, viewed : 5 Jan 2013 Entral Intelligence Agency (CIA) 2012, The World Factbook- Portugal, viewed: 3 December 2012, https://www.cia.gov/library/publications/the-world- factbook/geos/po.html Evans-Pritchard, A Portugal to need 'debt haircut' as economy tips into Grecian downward spiral, The Telegraph, January viewed: December http://www.telegraph.co.uk/finance/financialcrisis/9026144/Portugal-to-need- debt-haircut-as-economy-tips-into-Grecian-downward-spiral.html http://observatorio-das- desigualdades.cies.iscte.pt/index.jsp?page=projects&id=115 viewed: 5 Jan 2013 IMF Survey: Portugal on Target to Reform Economy (2012) IMF Survey: Portugal on Target to Reform Economy, available at http://www.imf.org/external/pubs/ft/survey/so/2012/car071712a.htm , viewed on: 5 Jan 2013 Observatorio-das-desigualdades.cies.iscte.pt (2010) Observatorio das Desigualdades: Estudos, available at: Portugaldailyview.com (2011) Bailout: Portugal will have interest rate reduced to Portugal Daily View, available at: http://www.portugaldailyview.com/whats-new/bailout-portugal-will-have- interest-rate-reduced-to-3-5, viewed: 5 Jan 2013 Roche, D Against the tide: Debt crisis Is Portugal the last domino?, Euromoney, June 2011, viewed: December http://www.euromoney.com/Article/2841504/Against-the-tide-Debt-crisisIs- Portugal-the-last-domino.html?copyrightInfo=true Sanati, C Why a Problematic Portugal Matters, CNNMoney, July viewed: December http://finance.fortune.cnn.com/2011/07/11/why-a-problematic-portugal- matters/ Sarmento, J.M., OECD, Journal on Budgeting 2010, Do Public-Private Partnerships Create Value for Money for the Public Sector? [...]
[...] Although there is no unanimous definition of public-private partnership OECD's definition of a PPP is as follows: . an agreement between the government and one or more private partners (which may include the operators and the financers) according to which the private partners deliver the service in such a manner that the service delivery objectives of the government are aligned with the profit objectives of the private partners and where the effectiveness of the alignment depends on a sufficient transfer of risk to the private partners (OECD p. [...]
[...] At this point Portugal received First part of the bailout package from IMF and EU was a part which is directed toward decreasing the interest rates. After the bailout is put in place, as the graph indicates, there is an obvious decrease in interest rate. This is expected to upsurge investment and accelerate the overall level of economic activity UNEMPLOYMENT RATE As seen from the graph, unemployment rate shows a constant and stable increase from the beginning of the crisis till January 2012. In the beginning of the crisis unemployment rate ranged from to just over of total labor force. [...]
[...] The most of the population are in huge loans, so many of them work two or three jobs to repay the debts. The Portuguese banks are also not quite stable. The foreign investments are missing. It is forecasted that the general consumption will fall for It is hard to save money in the country where the average yearly earnings are 17 hundred Euros, without taxes. In this situation, with reduced consumption, high unemployment, missing investments it is hard to believe that Portugal will achieve a minimal economic growth rate needed to exit the crisis. [...]
[...] The President of the European Commission stressed the solution is “credible and coordinated”, and also, “particularly positive for Portugal”. (Portugaldailyview.com 2011) 4. COMPARISON OF THE MAIN MACROECONOMIC INDICATORS DURING THE CRISIS 4.1 GDP per capita It can be seen from the graph how GDP per capita variated from 2006 to 2011. In 2006, the GDP per capita was 15.197 Euros, while in 2008, when the crisis started to occupy Portugal, the GDP per capita started to decrease from 15.499 to 15.034 in 2009. Then it increased for about 0.331 Euros in 2010. [...]
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