| Topic: | Reply | |
| Posted by: | Stuart Green | |
| Date/Time: | 10/07/18 10:09:00 |
Portugal has been one of the strongest growing economies in Europe last year and seen strong economic growth since the financial crisis with manufacturing, tourism and the fiscal position all seeing a dramatic improvement. It is not really a good example to use if you believe the Euro is a bad thing. The problems that it experienced in the past were largely down to the over-rapid build up of domestic mortgages which fuelled an unsustainable property boom and hit their banks really hard. You could blame the Euro for this as it was driven by interest rate levels which the local market had not seen before but although the Euro was a factor in this the Portuguese government had tools to deal with the problem which it chose not to use such as tighter capital requirements for banks and a more restrictive fiscal policy. As with Ireland the government chose to let the good times role and later had to deal with the consequences. Being a member of the Euro is certainly helping with recovery in these economies because it gives them access to capital markets and low interest rates which has enable the current levels of high economic growth. |