Portugal plus?

It is intriguing to note that Portugal’s budget deficit fell to 0.5 per cent of gross domestic product in 2018, the lowest level since the country returned to democracy 45 years ago.

This clearly demonstrates that there is an alternative to austerity as the deficit has fallen from 11.2 per cent of GDP in 2011, when Portugal negotiated a €78 billion bailout with the EU and the International Monetary Fund.

The reduction is mainly driven by an increase in government revenues, including taxes and social security contributions reflecting economic growth and rising employment. Some other Eurozone countries expressed alarm when the centre-left Socialist government, with the support of the Communist Party and Left Bloc, took power in 2015 on an anti-austerity platform.

However, a series of government budgets cut taxes and restored civil servants’ salaries, eased a surtax on employees’ incomes and breathed new life into the welfare system.

So, while we continue to pursue an austerity agenda in the UK, what Portugal has demonstrated, despite concerns over the economic policies it is pursuing, is that there is another way. Rather than blindly following an austerity

agenda, the example set by Portugal is something we in the UK would be well-advised to take note of.

ALEX ORR Marchmont Road, Edinburgh