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Portugal

Yearbook 2010

Portugal. According to COUNTRYAAH, the economic recession Portugal entered into in 2009 continued with unabated strength throughout 2010. This meant that a recurring mantra for the year became austerity measures (mediated by the austerities) and how different parties reacted to them.

2010 Portugal

At the end of March, the Portuguese single-chamber parliament adopted a austerity package aimed at reducing the country's budget deficit within four years from 9.3 per cent of GDP in 2009 to 2.8 per cent in 2013 (from EUR 14 billion to EUR 5 billion). The package included measures such as public sector pay cuts, reduced military spending and tax increases. The unions reacted to this already in the spring with strikes or threats of similar measures.

Meanwhile, some other EU members were facing even greater financial problems than Portugal. This belonged first to Greece and then to Ireland, both of which had to rely on relatively cheap but short-term loans from the European Central Bank (ECB) in order not to put their countries into bankruptcy. Then, when Italy and Spain also joined the EU countries - called the PIIGS states - who had to stand there with their hat in hand to pay off their loans to the public sector, the economic situation was constantly deteriorating for Portugal.

On November 24, unions with 1.5 million members responded forcefully to the far-reaching and costly austerity measures, according to them. It was the biggest strikes in the country in 20 years and they affected mainly the community service, including health care and transport. More than 500 flights were canceled and the major ports in the country were paralyzed. On November 26, Parliament finally adopted the country's budget for 2011. This was later seen as an expression of the risk of becoming dependent on all kinds of emergency loans. The year ended with Moody's Investors Service, like other credit rating agencies, threatening to downgrade the country's repayment capacity and with it the possibility of obtaining additional loans from the ECB.

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