Back to external pressure : policy responses to the financial crisis in Portugal
Title: Back to external pressure : policy responses to the financial crisis in Portugal
Author: TORRES, Francisco S.
Citation: Susannah VERNEY, Anna BOSCO and Marina COSTA LOBO (eds), Southern Europe and the financial earthquake : coping with the first phase of the international crisis, London ; New York : Routledge, 2014, South European Society and Politics, pp. 55-70
The financial crisis caught Portugal in the midst of its long-protracted and slow fiscal consolidation process, which brought the budget deficit down to 2.2 per cent of GDP in 2008. The crisis was not a bursting bubble type of shock but it brought back the longforgotten external (liquidity) constraints. Given Portugal’s accumulated external imbalances, it is argued that the government should credibly pre-commit to mediumterm budgetary objectives with accelerated corrective measures to the 2009 fiscal overrun. Also, it should actively promote sustainable consumption patterns and a leap forward to a new ‘green’ competitive basis for sustainable development, thereby increasing the country’s general creditworthiness.
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