Tuesday

26th Mar 2019

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

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join 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.

Centre-right EPP faces showdown with Orban

The EU's largest political alliance, the EPP, will try to put the 'Orban issue' behind it going into the European election campaign. Hungary's ruling party, Fidesz, could be expelled or suspended from the political family.

EU countries push for new rule of law surveillance

Germany and Belgium have put forward a proposal for a "peer review" of EU countries' legal systems as member states and EU institutions struggle with disciplining member states that break EU rules.

News in Brief

  1. EU tables plan for joint approach to 5G security
  2. MEPs agree to scrap summer time clock changes by 2021
  3. European Parliament votes on reform of copyright
  4. New French-German parliament meets for first time
  5. EU parliament reduces polling ahead of elections
  6. UK parliament votes to take control of Brexit process
  7. EU publishes no-deal Brexit contingency plans
  8. EU urges Israel and Gaza to re-establish calm

Opinion

Catalan independence trial is widening Spain's divides

What is really needed is not the theatre of a rebellion trial, but a forensic examination of whether public funds were misused, and a process of dialogue and negotiation on how the Catalan peoples' right to self-determination can be satisfied.

Orban hosts Weber in Budapest for EPP showdown

The future of the Viktor Orban's Fidesz party inside the European Parliament's centre-right EPP political group hangs in the balance. On Tuesday, Orban and EPP chief Manfred Weber meet in Budapest in a final effort to iron out differences.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  2. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  3. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  4. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  5. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  6. Nordic Council of MinistersNordic commitment to driving global gender equality
  7. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  8. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  9. Nordic Council of MinistersNordic talks on parental leave at the UN
  10. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  11. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  12. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID

Latest News

  1. EU lawmakers pass contentious copyright law
  2. France takes Chinese billions despite EU concerns
  3. Europe before the elections - heading back to the past?
  4. Romania presidency shatters EU line on Jerusalem
  5. The Spitzen process - a coup that was never accepted
  6. Russia and money laundering in Europe
  7. Italy takes China's new Silk Road to the heart of Europe
  8. What EU leaders agreed on climate - and what they mean

Join EUobserver

Support quality EU news

Join us