You should have sticked to the plan

IMF and EU's plan for Portugal was not the one that was actually followed. The agreement stated that 1/3 of the necessary public recovery should come from taxes and the rest from Public Spending savings. This would ensure that we would be cutting on the least productive and ROI public activities, while partially sparing the weak Portuguese productive system (undermined by a very noncompetitive economic environment, unclear public directives and businesses and lack of proper education and management levels). Unfortunately, that was not the path that was then followed - Portuguese politicians (with the whispering blessings of Brussels and Washington) decided that it was not a good idea to face the Public bureaucracy and spending monster, and went softer on those cuts - transferring most of the burden to tax payers, and generating thus further inefficiencies in the economy. Remember may article on the failing multipliers ( http://my2centsontheworld.blogspot.pt/2012/10/austerity-multipliers-failing.html )? This is exactly it...

The result is at sight - it is called a crisis spiral, has, as I have already written a couple of times, heavier measures to control the deficit are generating deeper wounds at economical level that aggravate the deficit, until the budget and economic situations are simply unsustainable. How to get out of this? I already said - Portugal needs to cut inefficient spending (especially at Public level) and define and pursue a strategy for growth. If we have enough funding in the system to potentially generate that growth is though a question that is turning bigger and bigger...

http://www.publico.pt/economia/noticia/o-dobro-da-austeridade-resultou-em-quase-o-dobro-dos-defices-previstos-1588009