Portugal's Social and Labour Market Policy: The Crisis, the Troika and Beyond

Abstract

Abstract:ABSTRACT. Starting in 2009, Portugal was hit hard by the Eurozone crisis. This article provides an overview of the effects of the crisis, and the policy responses to it, on Portuguese unemployment, poverty, inequality and emigration. It then examines the changes in social and labour market policy that were externally imposed by the Troika through its emphasis on austerity and structural reform. Finally, it evaluates the partial reversals undertaken by the António Costa government, arguing that these were made possible by (1) the end of the memorandums of understanding, (2) Portugal's success in reducing its budget deficit, and (3) the new nature of EU supervision under the European Semester system. In examining policies on the labour market, pensions, the minimum wage and anti-poverty programmes, the article argues that these policy areas have undergone distinct shifts in governance from broad national autonomy, to strict external control, to relative autonomy as long as budget deficit targets are met.KEYWORDS. Portugal, crisis, employment, social policies, Troika.