Quote Originally Posted by Jolt View Post
So, the Portuguese government is duly doing its job in reducing the large deficit incurred from the crisis at a nice pace so far.

So much that the doomsday theories being forwarded by Paradox members now effectively exclude Portugal as a country on the brink of collapse or with a risk for it to happen.
Portugal is structurally the weakest economy of the Western EU member states. Growth has remained dissapointingly sluggish for decades. Not that this is the final word about Portugal. By purchasing power, a lot of the gap dissappears. There is a good quality of life too. Provided I was not poor, I, for one, might prefer a life in Portugal over one Finland, but that's highly subjective.

Three differences with Greece: Portugal did not falsify statistics, Portugal is on the whole a valued and reliable EU member, and the national debt of Portugal stands in fact at only the same level as that of Germany. This last bit is important. There are three main determinants for 'on the brink of collapse': a high deficit, a high debt as % of GDP, and a weak economy. Greece fails on all three. Portugal only two.



For comparison:

In 2009 the largest government deficits in percentage of GDP were recorded by the BIGS (and not PIGS), the southern rim and the spendthrifty neo-liberal islands:
Ireland (-14.3%)
Greece (-13.6%)
United Kingdom (-11.5%)
Spain (-11.2%)
Portugal (-9.4%), Latvia (-9.0%), Lithuania (-8.9%), Romania (-8.3%), France (-7.5%) and Poland (-7.1%). No Member State registered a government surplus in 2009.


Twelve Member States had government debt ratios higher than 60% of GDP in 2009:

Italy (115.8%)
Greece (115.1%)
Belgium (96.7%)
Hungary (78.3%)
France (77.6%)
Portugal (76.8%)
Germany (73.2%)
Malta (69.1%)
the United Kingdom (68.1%)
Austria (66.5%)
Ireland (64.0%)
the Netherlands (60.9%).

Interesting is that the new member states have very low government debt.