In the years leading to EMU, the Portuguese economy experienced robust growth, lower inflation and reduced budget deficits, allowing the country to meet the Maastricht criteria and participate in EMU.
A few years after the adoption of the euro, this scenario changed and the apparent success story revealed a more disappointing outcome. For several years, output growth has been subdued, fiscal performance deteriorated, and, what could initially appear a 'benign' current account deficit, attributed to the convergence process, seems now the result of weak competitiveness, due to increased wages and low productivity.
This paper reviews the Portuguese experience with the euro and analyses how EMU may have affected economic performance. It also discusses whether the Portuguese experience can provide any insights for new EU Member Countries, now in a process leading to the adoption of the euro.

Keywords: monetary union, monetary policy, exchange rate policy, Portugal

  Rita Bessone Basto - The Portuguese Experience with the Euro - Relevance for New EU Member Countries - plik pdf; (187 KB)