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| Portugal stays on track during market
downturn |
AS AN ELECTION pledge it didn't sound that snappy,
but when the Social Democrats came to power in Portugal in
May 2002, it was partly on the basis that they would sharply
cut the country's annual budget deficit relative to
GDP.
This was not entirely a home-grown idea. Portugal had recently
been warned by the EU that its deficit was too high, breaking the
criteria for membership of the eurozone, and it was threatened with
a hefty fine if the situation was not resolved.
Luckily, the government had plenty of assets to sell.
Privatizing a range of companies, including oil company Galp,
energy company Electricidade de Portugal and airline TAP, seemed
the obvious solution to the country's financial difficulties.
Shortly after it was elected the government announced that in
order to help the economy and boost the country's entrepreneurial
spirit, several of these sales, some...
