Portugal benefitted ‘marginally’ from adopting the euro
Portugal benefitted ‘marginally’ from adopting the euro in the first years after its introduction according to a ‘think-tank’ report.
And in the years that followed its introduction in 2000, the euro led to an increasing and progressive loss in prosperity for Portugal despite the continuing funds from the European Union aimed at the modernisation of its companies stock and infrastructure development.
The economists cited in the German report from the Centre of European Policy suggest that Portugal suffered a loss in prosperity worth €424Bn or €40,604 per capita.
They also argue that Portugal should urgently undertake structural reforms to increase GDP per capita to benefit the euro in the medium term. They call for an improvement in the country’s investment climate as well as greater public investment.
The economists stress that countries like Portugal suffer from a disparity in competitiveness because it cannot devalue its currency to remain internationally competitive, a method used by successive Portuguese governments before joining the single currency.
Since the introduction of the euro the erosion of international competitiveness has led to lower economic growth for Portugal and many of the other member states, an increase in unemployment (nevertheless less than 7% in Portugal) and a fall in tax revenues.
The economists Alessandro Gasparotti and Matthias Kullas concluded in the report “20 Years of the euro – Winners and Losers” what most local economists in Portugal have known for years – Germany was the country that most benefitted from the impact of the euro per habitant (+€23,000) while Portugal, France and Italy have been the countries that most lost out because of adopting the euro.