Competitiveness is embedded in the private sector. Employment is created only the private sector. Wealth increases through the private sector. No public intervention can manage to replace the private sector, no Government know how to make business and money. As a consequence, the real economy of a country relies on its private sector, not on the Government. Portuguese Prime Minister Pedro Passos Coelho understood this fact and decreased dramatically corporate tax from 25% to 7.5%.
Portugal is traditionally a leftist country. Since the Carnation Revolution in 1974, in which the Left threw out the fascist government of Marcelo Caetano, it is fashionable in Portugal to be leftist and being labeled socialist. If a proof was needed, in the 2011 elections, all 6 parties in parliament claimed to be leftist parties, and all the three parties who signed the Troika memorandum (yes, the ones who signed it were: PS, PSD and CDS/PP) have Social or Socialist in its very name.
Portugal is the third EU country after Greece and Ireland to need financial bail-out in order to avoid bankruptcy of the State. How did things go so wrong and for what reason – is it only the fault of the international financial crisis, or – more probably – bad management of public finances from the Potuguese government? Ricardo Campelo de Magalhães answers those questions in the light of a detailed analysis of Portuguese fiscal policy.
This seems not totally unrealistic since, unlike other euro zone countries, Finland requires approval from parliament before taking part in EU bailouts. And without unanimous approval from EU member states, there will be no bailout…
Because the music stopped.
As Thatcher said, “They [socialists] always run out of other people’s money”. Portugal is now a perfect study case for this golden rule, with its quadruple-crisis.
Portugal has a long tradition of corporate tax evasion. Perception of high tax burden, social tolerance to fraud and evasion, high psychological fiscal pressure* , instability and insecurity of the tax codes and complex and slow fiscal system are the factors usually pointed as the ultimate causes for this phenomenon.