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Portugal recovery is a ‘success story’ – European Mechanism

The Director of the European Stability Mechanism (ESM) considered the recovery of Portugal’s economic situation to be a success story.

“Portugal is a success story. It is one of our five success stories [together with Ireland, Spain, Greece and Cyprus],” the director of the ESM said.

Responding to a question from Lusa at a meeting with correspondent journalists in Brussels at the ESM headquarters in Luxembourg, Klaus Regling recalled that Portugal was able to leave the assistance programme three years after the start.

“A few years later, the positive effects of the reforms implemented are notorious,” he stressed in his response to Lusa, adding that Portugal now has, for the first time in 50 years, a balanced budget and high growth, above the average for the eurozone.

“And unemployment levels continue to fall, which are now below those recorded before the crisis,” he said.

According to Klaus Regling, the problem was that the results did not come out right away.

“The pace [of economic growth] was slow during the programme and the population sometimes did not like the measures implemented, which is normal because sometimes these adjustments are painful because they include a reduction in wages and cuts in pensions. They also cover structural reforms, and when that happens, people are usually not very happy,” the director said.

Portugal was under financial assistance as part of a macroeconomic adjustment programme between 2011 and 2014.

Despite acknowledging the very positive situation of the Portuguese economy, Klaus Regling pointed out that one area where there is work to be done is that of NPLs (non-performing loans).

“In Portugal, the NPLs are above the European average, but still much lower than a few years ago,” he said.

He added that they have been going down year after year and, therefore, he is confident that this will continue to happen.