Monday

2nd Oct 2023

Anti-austerity Portuguese PM warns of financial crisis risks

Portugal's prime minister Antonio Costa told the European Parliament on Wednesday (14 March) that the future stability of the single currency remains at risk.

Speaking to a half empty chamber, the socialist prime minister warned against complacency in addressing what he described as structural weaknesses in the eurozone.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"As long as the economic and monetary union is still incomplete, there will still be a risk of further crises," he said.

His speech is part of a series of debates on the future Europe and aimed to present Portugal in a new light, as a country that managed to exit from the depths of a 2008 financial crisis with both renewed growth and a strong social policy.

"In Portugal, we devised an alternative to the austerity policy, focusing on higher growth, more and better jobs, and greater equality," he said.

The measures imposed at the time by the then-conservative government had slapped additional taxes on incomes and cut benefits and pensions, given the conditions of a €78bn bailout from the European Union and the International Monetary Fund.

Those initial results saw education, health and social security plummet as poverty increased and unemployment reached new heights. Many such measures were later reversed by the Costa government in 2015, which then saw a rise in economic growth.

"The rise in earnings made economic operators more confident resulting in the fastest economic growth since the beginning of the century," said Costa.

Last week, the European Commission removed Portugal from the list of countries with serious macro-economic imbalances.

Last year, the country exited the so-called excessive deficit procedure. It means Portugal has reined in public debt and managed a budget deficit that no longer misses the EU three-percent target of gross domestic product.

"Who would have believed this a couple of years ago?" said EU commission president Jean-Claude Juncker, speaking after Costa.

Juncker said the employment rate in Portugal continues to increase as a result, in part, of huge efforts by the Portuguese.

But Costa also issued warnings and pressed for greater convergence, a term that broadly describes the process behind better European economic integration. It includes, among other things, the completing of the internal market and economic and monetary union.

"We cannot continue to perceive the eurozone just as a group of economies that compete with each other and the rest of the world. We have to view it as an integrated space," he said.

Costa also pressed his case for a bigger European Union budget and said Portugal was prepared to put in more contributions. But budget hawks such as Austria, Denmark, Netherlands and Sweden are likely to reject his views.

The issue is part of a larger debate triggered by the UK referendum vote to leave the European Union, followed by a 2016 Bratislava declaration where national leaders pledged their loyalty to the Union.

It also feeds into last year's paper from Juncker that sets out five scenarios for the future of Europe ahead of the European Parliament elections in 2019.

Costa's address to the parliament was the third by a EU leader in a series on the subject. In April, it will be French president Emmanuel Macron's turn to lay out his vision.

Portugal held up as symbol of EU recovery

Portugal to sail out of troubled waters after eight years of financial crisis, EU commission predicted, amid broad but "fragile" recovery in European economy.

Opinion

Is this the future of Europe?

European Parliament debates with EU leaders have become a repetitive series of monologues that forget to ask what citizens want from the EU.

Analysis

Slovak's 'illiberal' Fico victory boosts Orbán, but faces checks

Fico has the potential to shift Slovakia from the West and jeopardise the EU unity in its stance against Russia's Ukraine war. His victory could also have a domino effect in central Europe and empower of other far-right, populist movements.

Opinion

Why EU Commission dumped Google's favourite consultant

This should be a wake-up call to ensure consultancy firms with a vested interest are permanently excluded from public tenders. The close relationship between the EU's competition authority and economic consultants poses a serious risk to its independence.

Latest News

  1. EU ministers go to Kyiv to downplay fears on US, Slovak aid
  2. Hoekstra faces tough questioning to be EU Green chief
  3. Frontex shared personal data of NGO staff with Europol six times
  4. Why EU Commission dumped Google's favourite consultant
  5. Slovak's 'illiberal' Fico victory boosts Orbán, but faces checks
  6. European Political Community and key media vote This WEEK
  7. Is the ECB sabotaging Europe's Green Deal?
  8. The realists vs idealists Brussels battle on Ukraine's EU accession

Stakeholders' Highlights

  1. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  2. International Medical Devices Regulators Forum (IMDRF)Join regulators, industry & healthcare experts at the 24th IMDRF session, September 25-26, Berlin. Register by 20 Sept to join in person or online.
  3. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  4. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  5. International Medical Devices Regulators Forum (IMDRF)Join regulators & industry experts at the 24th IMDRF session- Berlin September 25-26. Register early for discounted hotel rates
  6. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch

Stakeholders' Highlights

  1. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations
  2. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  3. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  4. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  5. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  6. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics

Join EUobserver

Support quality EU news

Join us