With EU aid looking like a free lunch, Portugal neglected to modernize, and the excessive emphasis on infrastructure had a negative impact on its economy. The upshot: Due to low productivity, low education levels and low technology, Portugal languished in the first years of the new century with average annual growth below 1 percent. It has now gone into reverse with its third recession in four years amid a mountain of debt.The windfall produced notorious excesses in the Madeira Islands. But just two years ago, European Commission President Jose Manuel Barroso, a former Portuguese prime minister, touted the region as a model of EU growth. The aid for years delivered spectacular returns, helping lift the standard of living above that in Italy and just lower than in France. Thirty years earlier it was one of the bloc's five poorest regions.
Unwise Spending Exposes Europe's Economic Errors
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts