Pedro Lains

The deepening of economic and financial integration in the European Union has led to different responses in the group of ‘cohesion’ countries. Ireland and Portugal stand out as the two extreme examples, as Ireland caught-up to the forerunners after the launching of EMU, in 1992, whereas Portugal lost ground. This paper looks at structural shifts in order to explain different

Pedro Lains Análise Social, vol. ... Portugal na Alvorada do Século XX, Lisboa, 1979, e O Desenvolvimento do Capitalismo em Portugal no Século XIX, Lisboa, 1981; M. Halpern Pereira, Livre-Câmbio e Desenvolvimento Económico, Lisboa, 1983; Joel Serrão, «Prefácio», in Joel ...

This article deals with the connections between economic policy and economic convergence and divergence in the European Union, by looking at the case of Portugal, still today one of its least developed member states. European and domestic economic policies changed across the period here studied, shifting from an emphasis on programmes aimed at fostering investment in infrastructures and knowledge, such as the structural and regional development funds, to policies giving higher relevance to fiscal and financial equilibria, after Maastricht. The change in polices was followed by economic divergence and we discuss in this paper the causality links between the two. The negative correlation between growth and monetarist policies became increasingly salient during the recent Great Recession and economic policy was again changed. Paradoxically or not, one-size-fits-all European monetary policies lowered the potential for integration, whereas a higher level of domestic participation in policy making may lead to the opposite effect, opening up prospect for higher growth and a return to a slower, but more balanced economic convergence. The experience of the periphery may have lessons for the deepening of European integration.

This chapter follows the steps of renovation of European economic history towards a more unified interpretation of sources of growth and stagnation. To better understand the diversity of patterns of growth, we need to look beyond the study of the industrialization of the core economies, and explore the centuries before it occurred. Portuguese agriculture was hardly ever at the European productivity and technological forefront and the distance from it varied substantially across the second Millennium. Yet if we look at the periods of the Christian Reconquista, the recovery from the Black Death, the response to the globalization of the Renaissance, to the eighteenth century economic enlightenment, or to nineteenth century industrialization, we may conclude that agriculture in this country of the European periphery was often adaptive and dynamic. The fact that economic backwardness was not overcome by the end of the period is no longer the most relevant aspect of that story. Long-term agricultural transformation in Portugal replicate to a large extent what occurred elsewhere in Western Europe, as far as our knowledge of both developments through such a long time span can tell, both in terms of timing and intensity, albeit at a distance. European agrarian transformation was not too different on the southwestern frontier.

During the last two decades, the Portuguese economy was caught between the scissor of accrued international competition and an overvalued exchange rate. Moreover, increasingly more open international financial markets and a substantial contraction of Portugal's risk, at the sovereign, firm and individual levels, led to large inflows of capital and the increase in public and private external debt. The euro and globalization are probably unstoppable and small countries such as Portugal cannot isolate from the rest of the world. Yet a better governance of the Eurozone and the world economy is clearly needed. The theoretical foundations for the necessary policy improvements are well known, partially because of the lessons from the past, from twentieth century Europe and elsewhere. It is important to analyse why policy changes have not been implemented, to discuss the possibility that they will be implemented and understand the inherent difficulties. This paper attempts at such exercises by looking at Portugal's experience since the Maastricht treaty.