Domestic Problems
- Forest Fires: Like in other countries with very hot summers and seasonal drying of soils and vegetation, every year large areas of the Portuguese forest is destroyed. This has an important impact on the economy because many people and industries depend on forestry related activities. It is also a very dramatic ecological problem and a safety issue for the populations.
- Portugal's Public Debt: The public debt exceeds 80% of GDP on 2009 figures. This problem is a threat to the Portuguese economy and the State's financial sustainability.
- Over-dimensioned Public Sector: The public sector has been generally considered a very large, expensive and inefficient part of the economy. An excess of public employees and useless bureaucracy results in the loss of millions of euros every year. From the XVI Governo Constitucional government, headed by Prime Minister José Durão Barroso, to the XVII Governo Constitucional government, headed by Prime Minister José Sócrates (which tried to create new rules and implement reforms aiming at better efficiency, rationalized resource allocation, fight civil servant excedentary overcapacity (excedentários) and less bureaucracy for both citizens and companies – e.g.: empresa na hora, PRACE – Programa de Reestruturação da Administração Central do Estado, and SIMPLEX – Programa de Simplificação Administrativa e Legislativa, among others), the "public expenditure problem" has been a major concern in Portugal, however it had little effect, and the country's public debt and deficit were both out of control by 2010. In addition, João Bilhim who directed in 2005 the committee responsible for the Programme for Restructuring the State's Central Administration (PRACE) said to be disappointed with the results of the reforms tried in the mid-2000s.
- Corruption: According to the 2008 Corruption Perceptions Index of countries published by Transparency International, Portugal had the 32nd lowest level of corruption, out of 180 countries. In 2009 it had slumped to the 35th place. Nevertheless, corruption has become an issue of major political and economic significance for the Portuguese. The responsible authorities and many civic associations and think tanks are trying to combat corruption before it increases further. Many abusive lobbies and corruption schemes are related to concessions, unclear approvals to contractors and economic groups, or job creation for and commercial agreements with friends and family members, mainly involving the huge public sector and companies. Some cases are well known and were widely reported in the media, such as the affairs in several municipalities involving local town hall officials and businesspersons, as well as a number of politicians with wider responsibilities and power. Notable criminal cases include the Face Oculta, the Oeiras Municipality Mayor Isaltino Morais scandal, the Apito Dourado and the Saco Azul de Felgueiras.
Read more about this topic: Economy Of Portugal
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“Our domestic problems are for the most part economic. We have our enormous debt to pay, and we are paying it. We have the high cost of government to diminish, and we are diminishing it. We have a heavy burden of taxation to reduce, and we are reducing it. But while remarkable progress has been made in these directions, the work is yet far from accomplished.”
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