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Portugal

27 June 2018

Portugal: an assessment of the reforms of the left shows that the country isn’t there yet

The left alliance in Portugal promised a radical change of the socioeconomic policy that was for a long time dominated by a neo-liberal economic agenda. And in the meantime, the government has won international praise for defying the perceived wisdom that austerity is the only way out of a crisis. However, despite a good record on poverty alleviation, too many citizens continue to live below the poverty line.

The government that was installed in 2015 promised the nation an end to austerity after four years of belt-tightening and cost-cutting under their conservative rivals. And indeed, the policy has fundamentally changed, with no more public-sector pay cuts and the reinstatement of previously abolished public holidays. The government also reversed welfare cuts, while unemployment fell sharply, and the minimum wage has been increased to a monthly 580 euros. The policy of the government has become a best-case scenario of centre-left governance for many, in defiance of the general rightward shift in politics. According to observers, the present alliance of centre-left Socialists, Communists and Left Bloc functions with a considerable dose of pragmatism and has put an end to the ‘curse’ of more than four decades of irreconcilable divisions within the left that pushed the Socialist Party towards the right and isolated the radical left in a ghetto of impotence and noisy self-righteousness.

However, there is still a long road to go as the living standards of the average Portuguese still haven’t improved much and too many households are still feeling the pinch. Figures published by the National Statistics Institute (INE) show that around 2.4 million people, or over a fifth of the country’s 10.32 million citizens, are at risk of falling into poverty. The figures in INE’s Survey on Living and Income Conditions, conducted since 2004, through face-to-face interviews, targeting 14,052 families in 2017, reveal that a total of 2,399,000 people (or 23.3% of the population) were at risk of poverty or social exclusion in 2017. The good news is that there this number is decreasing (down 196,000 compared to 2016).

The definitive data indicate that the median equivalent monetary disposable income in nominal terms was 9,071 euro in 2016, corresponding to an at-risk-of-poverty threshold of 5,443 euro. The survey includes questions about the household and the income of all household members aged 16 or over. The statistical indicator for the people at risk of poverty or social exclusion assesses risk of poverty based on severe material deprivation and very low per capita labour intensity.

Youngsters and retired persons are overrepresented: 18% (431,000) of all citizens in poverty or social exclusion were under the age of 18, and 18.8% (451,000) were people aged 65 or over. The total of citizens living in circumstances of severe material deprivation decreased in 2017 to 6.9% (708,000 people), 1.5 percentage points less than in 2016 and 2.7 percentage points less than in 2015.

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