Portugal has a long history of challenging conventional wisdom;
In an age when maps showed that the land suddenly ends somewhere around Bermuda and the waters teeming with sea monsters, Portuguese explorers braved the dangers, placing Vasco da Gama (the first European to reach India by sea) and Bartolomeo da Yas (the first to circumnavigate Cape of Good Hope), Ferdinand Magellan (first to circumnavigate the Earth);
At the forefront of global imperialism.
Now, Portugal's colonies are long gone, but this country's penchant for charting its own course is manifested in its uncanny ability to maintain what is arguably the most successful mixed economy in the European Union.
Despite the global financial crisis a decade ago and the economic recession caused by the pandemic, Portugal emerged as a growth model for small economies, which struggled to balance cultural traditions and political values in the face of the demands of more massive economies, such as Germany, France, and Italy, which share the use of euro.
Despite the financial constraints this symbiosis imposes on the eurozone's smaller members, Portugal has found a formula for maintaining a more rational cost of living in Western Europe, with relatively low unemployment, steady economic growth, and general popular complacency in a polarized era.
Portugal, among a group that includes Portugal, Ireland, Italy, Greece and Spain, among the eurozone members of heavily indebted countries, recovered from the global recession caused by the Corona epidemic in the fiscal quarter ending on June 30, despite the restrictions imposed due to the Corona epidemic that hit the sector Tourism is important in Portugal;
Its economy expanded at an annual rate of 4.6%, according to the European Commission.
Portugal ranks 17th in the Global Index of Healthcare Innovation (Getty Images)
The road to recovery
The International Monetary Fund and the Portuguese Central Bank agree that Portugal will grow around 4% in 2021, a major achievement for a country that relies heavily on tourism, which has essentially dried up in 2020.
Unemployment in Portugal is estimated at 6.7%, which is a positive rate if compared to Germany, the traditional superpower in the European Union, which has an unemployment rate of 5.5%, and even to the United States 5.4% last July.
In contrast, the unemployment rate for its neighbor Spain is over 15%, Italy has just managed to fall below 10%, then Greece, which remains the sick man of Europe at 15.9%, and even Ireland - taken as an example by the financial engineers who designed the terms of the harsh rescue package The Eurozone has a higher unemployment rate of 7.6%.
Portugal has been able to defy stereotypes about the people of southern European countries "assuming that they are lazy and rude", and that countries ruled by socialists do not have the competence and competitive spirit to combine growth, social cohesion and quality of life.
US News & World Report, which doesn't leave a topic alone and ranks it, teamed up with the Wharton School of the University of Pennsylvania and the Brand Asset Value group to rank Portugal as one of the world leaders in "quality of life."
The methodology is ambiguous and the G-20 is a mixture of city-states, Scandinavia and Northern Europe, yet Portugal comes in at number 21, just behind the United States.
Portugal ranks 17th in the Global Index of Healthcare Innovation, in an annual study conducted by the Foundation for Equal Opportunity Research, a think tank, and in the Index's ranking for quality in care selection and patient outcomes, Portugal is ranked third globally.
This was not always the case. The financial crisis of 2008 and 2009 exposed the weaknesses and contradictions of the eurozone project. The merger of the economies of countries such as Germany and France into a single currency with countries such as Latvia, Cyprus and Greece led to turmoil.
And because of their inability to devalue the national currency - the traditional economic solution to the debt crisis - the economies of the weaker eurozone countries have almost lost access to global markets.
The solution imposed by the continent's major economies, led by Germany, was austerity so deep that it crippled small economies for more than a decade.
But Portugal was an exception. It almost went bankrupt due to the global financial crisis due to its inability to pay its quarterly debt or write down its value to avoid problems.
Portugal is still heavily burdened with government debt (Getty Images)
Growth in the midst of a crisis
Portugal accepted the implementation of a rescue agreement worth $92 billion, the so-called "troika";
Namely, the European Commission, the European Central Bank, and the International Monetary Fund in 2011, and in early 2013 the unemployment rate jumped to 18% before returning to decline, but Lisbon fulfilled its obligations, and unlike other countries where financial bailouts were arranged, the political scene in it remained relatively stable.
Socialist governments gave way to the Social Democrats in 2015, then returned to the Socialists in 2021, and along the way, Portugal resisted pressure to accept a second package of financial bailouts and got rid of austerity imposed on it from abroad.
Nevertheless, Portugal stood out, especially as it was long the poorest country in Western Europe, and once it was freed from the troika, it used a combination of tax incentives, financial incentives and innovative outreach to foreign investors, especially the golden visa and the path to obtaining citizenship in the European Union for any wealthy person Enough to buy 500,000 euros ($591,000) worth of property, and that helped fuel growth, which averaged about 2.6 percent from 2015 to the onset of the pandemic.
The momentum that built up during the Lisbon rebound gave space to open spending when the crisis intensified, and the result is that Portugal's economy is now able to weather the crises and what can be done differently in the context of the European recovery.
After taking the hit in 2020, a decline of just over 7.5% is expected to be followed by 4% GDP growth for 2021, and more than 5% in 2022, far higher than what the European Commission has predicted for 2022 for other countries in the bloc.
That beautiful Portugal, at relatively affordable prices, has been an open secret in the world of "global citizens" for more than a decade, and is now accelerated in part by unusually generous tax and immigration policies designed to lure wealthy northern Europeans as well as North Americans to settle. The expatriate population exploded from about 100,000 people at the beginning of the 21st century to nearly half a million people in 2020, as the rate of increase slowed for the first time since the financial crisis due to Covid-19, according to a report issued by the Department of Foreigners and Borders in Portugal.
However, the total number grew by 12.2% in 2020, and that has increased with the easing of restrictions this year.
The reason for this influx towards beautiful beaches, low prices and great seafood is the "Golden Visa", on the basis of which Portugal allows foreigners who buy expensive real estate in order to obtain a 5-year renewable residency, and they can start at any time during the citizenship procedures .
Previously, Portugal was a popular destination for retired Britons, Germans, and other European Union sun seekers, and now there are new waves of Chinese, Russians, Arabs and Americans, money started pouring in when the "golden visa" came into effect in 2021, and many are counting Portugal Currently the most attractive country for foreign investment in Europe.
Portugal was for a long time the poorest country in Western Europe (Getty Images)
Debt
But Portugal is still burdened with a lot of government debt, at about 155 percent of GDP at the end of 2020, and according to the Organization for Economic Co-operation and Development, that debt is large but followed an economic crisis that required spending, and again it is not 236% of GDP that weighs Greece or even 160% of US GDP.
Economic assessment firm Fitch Ratings believes that there are reasons for optimism after the sharp rise last year, and that government public debt will resume its downward path, supported by improved growth prospects, adequate financing conditions and the government's commitment to fiscal measures.
But the Portuguese, with much less buying in world markets, are still like sardines among salmon. In the dreaded monetary environment of the eurozone, the small European countries are showing that with a combination of policies and fiscal measures and a little luck they can grow the economy and live a good life too.