The impact of the EU economic governance in Portugal

Abstract

This article discusses the main changes introduced to the Portuguese labour market following the adoption of the Memorandum of Understanding of 2011. The intent behind the Memorandum's demands was to reduce the costs related to employment contracts, to expand both internal and external flexibility, and to relaunch collective bargaining under a new and more decentralised framework. However, several measures ended up being at odds not only with the Portuguese Constitution, but also with ILO Conventions and the (Revised) European Social Charter. We address the changes to wage policies, working time, employment protection legislation, and collective bargaining, which gave way to a new ‘flexibility-oriented’ labour relations model, characterised by a global reduction of labour protection levels. We argue that not only were these measures unable to fix the problems of the Portuguese labour market, but they also had crippling effects on social rights in general and, most particularly, on workers’ rights. Moreover, despite the overcoming of the economic crisis, as well as the changes to the political scene, the most significant alterations were maintained. This demonstrates that bailout reforms leave their mark, particularly when they correspond to measures previously under discussion and when their implementation is supported by external pressures.