Owen Jones, a columnist for UK newspaper The Guardian, has written an opinion article about how Portugal has proved “there is an alternative to austerity”.
“For years we’ve been told that only deep cuts can save our economy. Portugal’s socialist-led government has proved the opposite,” Jones says.
“Thanks to Portugal, we know how flawed the austerity experiment enforced across Europe was.”
As Owen explains, Portugal was one of the European nations hardest hit by the economic crisis and had to implement several measures to cut costs.
“Utilities were privatised, VAT raised, a surtax imposed on incomes, public sector pay and pensions slashed and benefits cut, and the working day was extended,” he writes, adding that the “human consequences were dire” and led to increases in unemployment and poverty.
But everything changed when the socialist government – with the support of “more radical leftwing parties” – assumed office.
“The prime minister, António Costa, pledged to ‘turn the page on austerity’: it had sent the country back three decades, he said. The government’s opponents predicted disaster – “voodoo economics”, they called it. Perhaps another bailout would be triggered, leading to recession and even steeper cuts.”
The truth is that this did not happen.
“The promised disaster did not materialise, and by the autumn of 2016 – a year after taking power – the government could boast of sustained economic growth, and a 13% jump in corporate investment,” according to Owen.
He adds: “This year, figures showed the deficit had more than halved, to 2.1% – lower than at any time since the return of democracy four decades ago. Indeed, this is the first time Portugal has ever met eurozone fiscal rules. Meanwhile, the economy has now grown for 13 successive quarters.”
The columnist continues by saying Portugal “offers a powerful rebuke” and that “Europe’s left should use the Portuguese experience to reshape the European Union and bring austerity across the eurozone to a halt”.
“Throughout Europe’s lost decade, millions of us held that there was indeed an alternative. Now we have the proof.”
Read the full article (click here).