The economy of Portugal and the European Union: From high growth prospects to the debt crisis

This paper documents some of the recent economic history of Portugal, since its accession to the EEC, to the adoption of the Euro and more recently to the financial and economic crisis. In the first part of the paper we show the economic performance of Portugal during the last 25 years till now, from the fast growth of the late 1980s and early 1990s to the current recession. We point out some of the reasons for this trajectory – slow productivity growth, disconnection between productivity and wages, continued external and public deficits – and choose three areas that must be improved in order to reverse the current downward spiral – justice needs to be more effective and faster, education needs to improve its quality and distribution across the population, and the public administration must become more efficient.