The rise and demise of the Troika virtues: Portugal, 2011-2013

The Memorandum of Understanding on Specific Economic Policy Conditionality, signed between the Portuguese Government and the European Union, the IMF and ECB, on 3 May 2011, was praised by a large number of Portuguese politicians, economists, and a considerable share of the public, from socialists to social-democrats and Christian democrats. The 34-pages long document was declared by many as an amazing, in-depth and detailed exercise, imposing measures that would overhaul the Portuguese economy, the State or the judiciary, in order to put the country in the right track and never default again in the future. The first press conference of the Troika representatives, on 5 May 2011, was attended massively by the media, and received widespread attention by a thrusting public, eager for a definite solution for the domestic economic problems. Since then, all has changed. The Troika representatives do not appear in press conferences or under the public eyes any longer and the number of politicians and economists that still praise its role has been reduced to a few diehards of austerity. This talk argues that the initial popularity of the Memorandum and the Troika is the outcome of a long-standing misperception of Portugal’s growth potential and position in Europe, which has long roots back in History. The analysis of the Troika experience, however, may be a valuable contribute to a better understanding of the problems facing the Portuguese economy within the European Union (Video, min. 2-32; Talk; Slides).