Portugal Given Three Years

Portugal has been given three years (till the end of 2008) to resolve its excess deficit situation. Portugal, like Italy only with less press attention, is in the midst of a serious economic slowdown. The decision to give Portugal slightly more time may be the result of a number of factors: it may be that they are perceived to be doing more to correct the situation than the Italian government is, the accumulated deficit in Portugal (68% GDP) is much less than the Italian one (106% GDP), and again, being a little less strict with Portugal counters the ‘you only chase small countries’ argument.

“We are proposing giving the Portuguese government three years to correct its deficit,” Amelia Torres, a spokeswoman for EU monetary affairs commissioner Joaquin Almunia, told reporters on Wednesday.

As a member of the 12-nation eurozone, Portugal is bound to hold its annual public deficit to under three percent of output under terms of the 1997 Stability and Growth Pact.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".