From the Troika to solid growth, from the darkest crisis to a country symbol of reforms, robustness and stability. All in just two years. The tale of Portugal continues to attract international interest and there is no field in which Lisbon is not cited as a positive example in a political-economic panorama characterized by opaque hues.
The latest figure that has surprised investors concerns unemployment, which fell to 8,2% in November against the almost 18% achieved in 2013. The result announced on 8 January is the best since February 2005.
And again: from 2014 to 2017, the Portuguese economy grew by 7% against the 3,4% conquered by Italy, the export of goods and services grew in volume by 24%, investments recorded a +19 %. Excellent result also for the public debt, which fell in 2017 to 126,4% of GDP (from 130% in 2016) and expected to further decrease in 2018 to 124,1%.
But what impressed economists the most was the performance of Portuguese government bonds: on December 15th, the spread between Italian BTPs and the analogous ten-year Portuguese bond was zeroed. To date, the balance of power has even reversed. The differential between Italian bonds and German bunds settles at 155 basis points with a yield of 1,97%, while that between the bonds of Lisbon and those of Berlin travels at 143 basis points with an annual yield of 1,87%. An impressive gallop if one takes into account that, in March 2017 (and therefore just ten months ago), whoever bought a Portuguese government bond would have secured an annual yield of 4,14%.
Given these data, the recovery of Portugal is considered a small economic miracle operated by the socialist premier Antonio Costa, who came to power at the end of 2015, and by his left-wing government, seen as a real one unicum in the European panorama.
He also played a very important role in the growth of Lisbon Mario centeno, Lusitanian economy minister and, from 13 January, president of the Eurogroup, the body that brings together the 19 economy ministers of the euro area, in place of the Dutchman Jeroen Dijsselboem. A fundamental task for Centeno who, after the amazing results achieved by Portugal, is now called upon to give a U-turn to the economic policy of the Eurozone after years of pro-German policies.
But to complicate the life of the new number one of the Eurogroup there could be an aspect that is beginning to irritate more than one EU country and create considerable embarrassment for the Lusitanian leaders. The new president could in fact find himself having to explain the reason why Portugal has decided in recent years to become a tax haven for retirees, a land characterized by low prices and above all by non-existent taxes.
For some time Lisbon has become favorite destination for retirees. According to calculations, over 50 people left from various European countries, including Italy, attracted by the high quality of life, low prices and above all by the possibility of being able to collect their pension gross. According to the law, in Portugal, those who become "non-habitual" residents do not have to pay taxes on their pension for the first 10 years. And we are not talking about a remodeling or a bonus, but about a real free tax policy.
A reality that made it become Lisbon a sort of promised land for the over 65s, but that is starting to anger the Portuguese themselves (who, unlike foreigners, are forced to pay taxes) and above all the other member states, which have been making agreements for some time to combat tax havens and tax evasion. All the more so if the push for the "zero levy" is a socialist government, considered the last European bulwark of a left that is increasingly in crisis.
At this point, therefore, a question arises: what has become of post-crisis Portugal, a tax haven or an example of autonomous and successful socialism?
Finally an honest article about Portugal and retirees. I am among those. and in my opinion the answer is the second: an example of successful and non-demagogic autonomous socialism. Portugal applies rules that all European countries have shared (double taxation treaties based on an OECD model). The real question, however, is another: why doesn't Italy do it? Which in terms of natural and artistic beauty is 10/20 times Portugal? With that extra 1% of GDP deriving from pensions that are put into circulation, Portugal does public works and creates jobs. Sure, house prices are rising and many Lisbon residents have to move out…but commuters have trains and public transport services that we (in Rome) dream of.